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Vice chairman Anand Mahindra told a news conference the company was targeting vehicle sales of 10,000 by the 2013 financial year.
The group plans to introduce new models in Sri Lanka soon after they are launched in the Indian market.
"We have ambitious plans for this market," said P N Shah, chief executive, International Operations, Automotive and Farm Sector of Mahindra.
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"We will be launching new products in the market in the next few months, new pick-ups, new SUVs (sports utility vehicles).
"The products we launch in India, within one or two months we will be launching them in Sri Lanka.
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Mahindra has already established a base for itself in Sri Lanka where it has been selling its range of tractors and utility vehicles for over a decade.
Mahindra™s Automotive Sector has sold over 4,000 vehicles in Sri Lanka since its market entry, a company statement said.
"We are also studying the possibility of introducing an electric car the Mahindra Reva - in Sri Lanka,