Group revenue fell 7 percent to 2.5 billion rupees.
"Weak market conditions that prevailed during the quarter were the primary factor for the lower volume of business and the drop in profitability," AMW Chairman Tilak de Zoysa told shareholders in a stock exchange filing.
"Vehicle registrations in the quarter under review indicate that new motor car registrations have reduced by 21 percent, whilst total registrations have declined by 30 percent when compared with the previous year," he said.
De Zoysa said banks and leasing companies were scaling down consumer credit facilities and high inflation and depreciation of the rupee was hurting the firm.
A build up of stocks has also pushed up interest costs from 48.7 million rupees to 159.7 million.
While costs were rising, the company