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Sri Lanka’s Automobile Industry Accelerates Towards $1 Billion Export Goal

May 10, Colombo (LNW): Chairman of the Sector Advisory Committee for Automobile for the Ministry of Industries, Dimantha Jayawardena, revealed the Sri Lankan government’s steadfast commitment to fostering automobile component manufacturing as a pivotal sector for economic growth. With plans to elevate exports from the current $200 million to a staggering $1 billion, Sri Lanka’s automotive industry is poised for substantial expansion.

Despite enduring formidable challenges during the tumultuous business landscape of 2020, Sri Lankan automotive component manufacturers have rebounded triumphantly, positioning themselves as significant exporters on the global stage.

Jayawardena emphasized the Ministry’s proactive stance in bolstering prospective assemblers and component manufacturers, aiming to amplify job opportunities to 45,000 within the sector. The overarching ambition is to establish Sri Lanka as a prominent global automobile manufacturing hub by 2037, aligning with the meticulously crafted 20-year master plan for the automobile assembly industry.

The temporary embargo on motor vehicle imports has catalyzed demand for locally assembled vehicles, propelling the industry forward. Moreover, the impending establishment of a state-of-the-art Research and Development (R&D) and testing facility by the Industrial Development Board (IDB) underscores Sri Lanka’s dedication to innovation and quality assurance, essential elements for enhancing competitiveness in the global automotive market.

Strategically positioned at the crossroads of major trade routes between the east and west, Sri Lanka garners interest from international automotive giants eager to invest in the burgeoning market. Concurrently, a burgeoning preference among Sri Lankan consumers for locally assembled vehicles further augments the industry’s growth trajectory.

The landscape of Sri Lanka’s automobile assembly industry is undergoing a remarkable metamorphosis, attracting renowned brands such as Hyundai, Proton, BAIC, and Mahindra, among others. The approval for assembling an extensive array of vehicles, ranging from SUVs and cars to two-wheelers and buses, underscores the diversification within the sector.

The entry of electric bike assemblers like KD Rize, Dyno, and Senaro, alongside established players like JAC and FOTON, signals a paradigm shift towards sustainable transportation solutions. By year-end, the number of assemblers operating within the local automobile assembly industry is projected to surpass 30.

To ensure adherence to stringent quality standards, assemblers are mandated to achieve a domestic value addition of over 20% through the utilization of locally manufactured automobile components. Many local manufacturers have undergone rigorous product development and approval processes to uphold the esteemed global Original Equipment (OE) standards set by international brands.

Since the inception of the Standard Operating Procedure (SOP) in 2021, Sri Lanka has seen a surge in automobile and motorcycle assembly plants, with over fifteen currently operational. With four additional assembly plants slated to commence operations within the next three months, and an additional eleven registered by the Ministry of Industries, Sri Lanka’s automobile industry is on an upward trajectory towards unprecedented prosperity.

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