Vehicle registrations slow in October as pent-up demand wanes

• Total electric vehicles at 4,025, down from 4,521 in September 

The total number of vehicles registered with the Department of Motor Traffic in October showed a slight decline to 47,685 from 48,708 units in September, a sign that the initial pent-up demand appears to be fading towards the year-end. However, this overall dip comes amid a rise in brand-new motor car registrations, including electric cars, which climbed to 799 units from 486 units in September, according to the monthly vehicle registration summary by JB Securities.

Despite the uptick in brand-new units, total motor car registrations were slightly down to 3,612 from 3,943 units a month ago. With the October numbers, Sri Lanka has seen 267,782 vehicles registered in the first ten months of the year, marking a significant high for the country.

Throwing a wrench into this trajectory, the Central Bank last week cut the loan-to-value (LTV) ratios for vehicles to 50 percent for personal vehicles and 70 percent for commercial vehicles. This move is viewed by analysts as a step in the right direction to rein in an unsustainable increase in vehicle numbers and direct funding into more productive sectors of the economy capable of generating a higher multiplier effect.

Further impacting the sector, the budget presented last week made vehicle imports subject to the 2.5 percent Social Security Contribution Levy (SSCL), in addition to levies at the point of manufacture or sale, though wholesale and retail sales of vehicles remain exempted. However, economists with neo-liberal leanings may hold differing interpretations regarding the restriction or liberalization of vehicle flows.

Meanwhile, a detailed breakdown of vehicle registrations for October showed Perodua leading the category with 282 units, driven primarily by the Bezza with 223 units and the Axia with 59 units. According to JB Securities, the BAW E7, a Chinese-made entry-level EV, recorded 263 units. The model is powered by a 30 kW motor paired with an 18.72 kWh battery and retails at approximately Rs. 5 million. Toyota followed in third place with 119 units sold—led by the Wigo at 79 units—while another Chinese EV brand, Wuling, recorded 78 units.

Total electric vehicle registrations across all categories and brands stood at 4,025 in October, down from 4,521 units in September. In the two-wheeler and three-wheeler segments, the month recorded 32,768 motorcycles and 2,541 three-wheelers, compared to 32,626 and 3,015 units respectively in September.