Atto 2 down and BAW and Kaiyi up: Lowest vehicle registrations in August after 9 months

In August 2026, Sri Lanka's total vehicle registrations fell by 13.8 percent compared to the previous month, decreasing to 45,569 units. According to the September 2026 market analysis report released by HNB Stockbrokers Research (HSB Research), this is the lowest monthly value recorded since the 43,810 units reported in November 2025.

The tightening of loan-to-value (LTV) ratio limits for vehicles and the extended import surcharge have primarily impacted consumer demand.

Motorcycle registrations, which represent the largest share of the market, fell by 11.9 percent to 33,613 units. Additionally, the combined registrations of brand-new motor cars and Sport Utility Vehicles (SUVs) showed a significant decline of 33.9 percent. Considering the direct impact on listed automotive sales companies, HNB Stockbrokers has specifically focused on brand-new motor cars, SUVs, and commercial vehicles in its analysis.

Total motor car registrations in August were 2,652 units, of which 632 units, or 23.8 percent, were brand-new vehicles. SUV registrations in the same month were recorded at 3,100 units, with 35.3 percent, or 1,093 units, being brand-new vehicles. Furthermore, commercial vehicle registrations totaled 1,919 units, with 68.3 percent, or 1,311 units, being brand-new vehicles.

Brand-new motor car registrations decreased by 38.1 percent compared to the previous month, falling to 632 units. Although the BYD brand managed to maintain its market lead by registering 342 units, its market dominance somewhat declined due to a 56.3 percent drop in registrations compared to July. Meanwhile, Kaiyi and BAW brands saw growth, with Kaiyi registrations increasing by 282.4 percent to 65 units, securing the second position, and BAW registrations rising by 10.9 percent to 61 units. The Atto 1 model, priced between LKR 7 million and 9 million, was the most in-demand model, while the Dolphin model, priced between LKR 10 million and 13 million, took second place. In August, 87 percent of brand-new motor car registrations were Electric Vehicles (EVs) (a decrease from 92 percent in July), and notably, all top five leading vehicle models in this category were EVs.

Brand-new SUV registrations decreased by 31.3 percent compared to the previous month, totaling 1,093 units. The Jetour brand surpassed BYD to claim the first position, securing a 26.8 percent market share, driven by the success of its T2 model. Suzuki registrations fell by 54.9 percent, while the BYD brand dropped to third place due to a 68.6 percent decrease in registrations to 148 units. The BYD Atto 2 model, which was prominent in July, saw an 84.5 percent decline and exited the top five leading models.

Among brand-new SUV registrations, the share of hybrid vehicles increased from 25 percent in July to 49 percent in August, surpassing the share of electric vehicles. The share of electric SUVs decreased from 28 percent to 14 percent. This is attributed to the demand for competitively priced hybrid models, and HSB Research indicates that despite a slight reduction in EV representation, the overall trend of vehicle electrification remains strong.

Brand-new commercial vehicle registrations decreased by 9.1 percent compared to the previous month, recording 1,311 units. Although there was growth in the truck and bus categories, the decline in pickup truck registrations impacted the overall commercial vehicle volume. Pickup truck registrations fell by 19.3 percent to 381 units, with Mahindra and Tata collectively holding an 86.4 percent share of that market. Truck registrations increased by 2.2 percent to 416 units, with Isuzu leading with a 39.4 percent share, followed by Lanka Ashok and Tata. Bus registrations rose by 33.7 percent to 250 units, with the Foton brand taking the lead with a 42.4 percent share.

The 50 percent customs import surcharge, temporarily imposed by the government since mid-May, was extended from August 14, 2026, to December 31, 2026. However, this surcharge does not apply to Letters of Credit (LCs) opened on or before May 15. Strict LTV restrictions, effective from May 25, reduced the maximum loan-to-value ratio for motor cars, SUVs, vans, and three-wheelers from 50 percent to 40 percent, and for commercial vehicles from 70 percent to 60 percent. HSB Research states that due to this tax extension and LTV restrictions, vehicle affordability will decrease, and demand will be controlled for the remainder of the year, with the impact being more pronounced on mid-to-high-end vehicle segments. Lower-priced vehicle segments may remain comparatively more stable.

Considering the performance of listed automotive companies in the stock market, the BYD brand, distributed by John Keells Group, maintained its lead in the motor car category with the strength of its Atto 1 and Dolphin models. However, it dropped to third place in the SUV category due to a significant decrease in Atto 2 model sales. Currently, about two-thirds of BYD's SUV sales are represented by the Sealion model line. Under Browns company, BAW brand registrations increased to 61 units, raising its brand-new motor car market share from 5 percent to 10 percent. JAECOO registrations under Hayleys company decreased from 94 units in July to 85 units in August, while Kaiyi registrations increased from 17 to 65 units, securing the second position in the motor car category due to demand for the Kaiyi e model.

Under DIMO company, brand-new Mercedes-Benz vehicle registrations increased from 14 to 21 units, while Tata registrations decreased from 298 to 191 units, indicating a slowdown in commercial vehicle demand. Under Access company, five brand-new Land Rover SUVs were registered in August, and Access Engineering Ltd. / Sathosa Motors PLC registered 164 brand-new Isuzu trucks. Furthermore, Lanka Ashok truck registrations increased from 22 units in July to 108 units in August.