[By Observer News Wang Yi] For decades, the roads of Sri Lanka have been dominated by Japanese imported sedans and Indian small hatchbacks. Brands like Toyota, Nissan, and Suzuki are almost everywhere. But this year, with the entry of Chinese car brands such as BYD, SAIC-GM-Wuling, and Beijing Automotive Works (BAW), the local market is experiencing a major transformation.

"A car revolution is taking place," reported Nikkei Asia on June 23, as the Sri Lankan government lifted the ban on car imports, and demand for Chinese cars in the country is growing rapidly. In the next five years, three to four out of every ten cars on Sri Lankan roads may be electric vehicles, more than half of which could be Chinese electric vehicles, while Japanese and Indian automakers will lag far behind.

"The market has great growth potential"

According to reports, Sri Lanka's local car manufacturing capacity is limited, with only a few small assembly and manufacturing plants, so this island nation with a population of 23 million has long relied on imported vehicles. However, car imports in Sri Lanka came to a halt in 2020, when the government imposed a complete ban on car imports to protect foreign exchange reserves amid the worst economic crisis in decades.

Until February 2025, the Sri Lankan government lifted the import ban, and car imports quickly rebounded. Data shows that the import value of passenger cars in Sri Lanka surged from $3 million in January to $107 million in April, accounting for 6.4% of the country's total imports for that month.

In this wave of imports, not only traditional Japanese brands have returned to Sri Lanka, but several Chinese electric vehicle brands, including BYD, have also entered the market strongly. On April 7, BYD started delivering its first batch of new energy vehicles in Sri Lanka. By late May, Wuling, BAW, and Chery's electric vehicle brand, Deep Blue, also entered Sri Lanka successively.

BYD store in Colombo, Sri Lanka, Nikkei Asia

In March, at the BYD flagship store in Colombo, Sri Lanka, 43-year-old foreign trade professional Prasad Vijayakon took his son, held up his phone, and video-called his wife, circling around an ATTO 3. He has traveled to China multiple times a year and has often taken this model, and he already knows the design details and comfort experience well.

"This SUV offers a good driving experience, and the spacious space is very suitable for a family. My wife likes the aurora white color, the stylish body design, and the cool rotating center screen. I pay more attention to its safety features and cost-effectiveness. Choosing a Chinese new energy vehicle also aligns with environmental protection concepts," Vijayakon said to Xinhua News Agency.

The Daily Mirror of Sri Lanka reported at the end of last month that the growth rate of demand for electric vehicles in Sri Lanka exceeds expectations. Since BYD entered the market earlier this year, the number of reservations has exceeded 5,000. John Kears, director of CG Automobiles, a BYD dealer in Sri Lanka, said, "The early success of BYD in the new energy vehicle market in Sri Lanka reflects our strong partnership and our shared vision for the future of the automotive industry," and the market growth "has great potential."

Cost, service, and technical advantages leave most traditional automakers far behind

Nikkei Asia analyzed that the shift of Sri Lankan consumers from oil-powered cars to electric vehicles is based on their choice to save costs after experiencing fuel shortages, long queues for refueling, and high fuel prices during the economic crisis.

"Frugal Sri Lankan consumers still have lingering memories of queuing to buy fuel," said Imran Furkan, CEO of Tresync, an Australian-based consulting company operating in Sri Lanka. Sri Lanka has over 900,000 registered cars, and fuel expenses are a heavy burden for many families. In this context, despite the higher initial cost of electric vehicles, their long-term economic benefits are significant.

Buddhika Disanayake, a resident of Colombo, said he has already reserved an electric vehicle and expects to pick it up in July. Although its price is much higher than a mid-range Japanese car, he still believes it is a more practical and economical long-term choice.

Additionally, another major reason for the success of Chinese brands is their strong local partner network and after-sales service system. Nikkei Asia pointed out that BYD, Wuling, BAW, and Deep Blue not only provide up to eight years of warranty but also have a complete maintenance and spare parts supply system, while many international brands are far behind in this regard. For example, Tesla has not yet established an official dealer in Sri Lanka, and only registered four new cars last month. In contrast, BYD registered 799 cars in May, second only to Toyota's 1,345 cars.

Number of registered cars by brand in Sri Lanka in 2025, Nikkei Asia map

"We are not just selling cars; we are providing customers with peace of mind," said Teranka Carim, CEO of Prime EV Automobiles, the main dealer of Deep Blue in Sri Lanka. The total cost of owning a Deep Blue car is lower than that of a fuel car, and the used car resale value is also strong. Moreover, Deep Blue and BYD's technology is much more advanced than that of most traditional automakers," Carim said.

Carim revealed that since Deep Blue launched in Sri Lanka in late May, the market response has been "very enthusiastic," with orders far exceeding expectations.

Nikkei Asia analysis pointed out that the shift to electric vehicles also benefits Sri Lanka. Currently, Sri Lanka spends about $4.5 billion annually on importing fossil fuels, 25% of which is used for passenger cars. Charitha Subasinghe, president of retail business at John Kears Group and official representative of BYD in Sri Lanka, expects that BYD has already imported 2,600 cars and will import 2,700 more in July.

"It has nothing to do with the country of origin," Subasinghe said, "the key is whether a brand can meet the changing and increasingly complex needs of Sri Lankan consumers. Now, Chinese electric vehicle brands do better than any other brand in this aspect."

Maya Majueran, head of a Sri Lankan consulting platform, also holds the same view. He said that Japanese automakers are lagging behind in electric vehicle technology, and Indian manufacturers are even further behind.

Majueran predicted that if the current trend continues, Chinese electric vehicles may consider local assembly in Sri Lanka. "In the next five years, three to four out of every ten cars on Sri Lankan roads may be electric vehicles, and more than half of them could be Chinese electric vehicles."

This article is an exclusive contribution from Observer News. Reproduction without permission is prohibited.

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