By: Staff Writer
August 10, Colombo (LNW): Sri Lanka should urgently develop a policy framework to promote the export of old and classic vehicles, turning a growing global demand into a revenue stream that can both revitalise the country’s automotive sector and reduce the burden of high import taxes on new vehicles, industry experts say.
Sajeev Kshathriya Rajaputhra, General Secretary of the Global Federation of Sri Lankan Business Council (GFSLBC), said exporting old vehicles at competitive prices could allow the government to use profits to lower taxes on new imports, phasing out outdated models and modernising the nation’s vehicle fleet.
“Currently, a 300% tax is imposed on imported vehicles, and the domestic resale market inflates prices to more than three times their original cost,” Rajaputhra noted. “If exporters were given permits allowing them to offset losses against duties on their next import, it would create a sustainable cycle—old vehicles go out, new vehicles come in.”
He pointed out that Sri Lanka, along with Ethiopia, is one of the few countries where a car can sell for more than its purchase price even after years of use, due to artificially inflated values. Over time, these vehicles deteriorate into scrap metal. “The price should reflect the true worth of a vehicle, not an artificially created premium,” he said.
The GFSLBC has proposed three steps to the government: granting it a clear mandate, establishing a global branch, and ensuring direct access to the President’s Secretariat to strengthen public-private collaboration. Rajaputhra stressed that Sri Lankan entrepreneurs abroad have the expertise to help drive economic growth if the government engages with them.
While old vehicle exports could help modernise the local market, experts say Sri Lanka is also missing a lucrative opportunity in the booming global trade of classic cars and motorcycles. Once seen as luxury toys for the wealthy, these vehicles have become high-performing investment assets in the US and Europe, outperforming bank deposits, art, coins, stamps, and even major stock indexes over the past decade.
A pioneer in the vintage car market explained that collectors and investors alike are drawn to the sector’s unique mix of aesthetic appeal and financial returns. “Classic cars are an investment you can enjoy while also using them as a currency hedge—they can be sold in markets offering the highest returns,” he said. Motorcycles, he added, have even greater export flexibility as they avoid left- or right-hand-drive restrictions and are easier to transport.
Condition plays a decisive role in value: well-maintained original vehicles can command a 50% premium over poorly restored ones. With restoration costs high, export markets pay top dollar for authentic, running-condition classics.Industry advocates believe Sri Lanka could develop both old and classic vehicle exports into a niche economic sector, bringing in foreign exchange, creating jobs, and giving local investors a foothold in a lucrative global market—while simultaneously refreshing the country’s aging vehicle fleet and easing the tax burden on new imports.
