Indian automotive major Mahindra and Mahindra Limited will open a vehicle assembly plant in Sri Lanka with an investment of $ 50 million by August this year with an eye on the export market.
The plant, currently under construction in Welipanna in the Kalutara District, will be a joint venture between Sri Lanka’s Ideal Motors Limited, and Mahindra and Mahindra group to set up a to assemble vehicles with an investment of over $ 50 million.
Mahindra Automobiles Chief of International Operations Arvind Mathew said that this would be the first Mahindra assembly plant built outside India.
Ideal Group Founder and Executive Chairman, Nalin Welgama said that production at the vehicle assembly plant at the factory complex in Welipenna, Kalutara will commence within the next few months carefully considering the 2019 budget impact on the industry.
One of the newest SUV models of Italian-based Pininfarina’s automotive design prowess will also be considered for assembling here in Sri Lanka under this joint venture with Mahindra and Mahindra, a part of the US$19 billion Mahindra Group based in India, he disclosed.
Mahindra will hold a 35 per cent stake in the JV while Ideal Motors will have 65 per cent, he pointed out adding that it has over 30 per cent of value addition in Sri Lanka.
It has been planned to produce several vehicle components including tyres, batteries, seats, seat covers, rubber parts, etc locally.
With the aim of manufacturing import substitutes for vehicle industry, Ideal Motors will provide facilities for local automotive components manufacturers to produce items of international standards under the global expertise of Mahindra.
An Automotive Vendor Park will be established at the Welipenna factory complex with the aim of exporting vehicle components for the international market specially the vast Indian market, he disclosed.
The company will assemble around 2,000 vehicles per year for the South Asian export market, Mr. Welgama opined.
He said that the total investment for the project would be close to Rs. 3 billion and it would have the ‘Made in Sri Lanka’ tag in it. “We hope to market the KUV100 vehicle at around Rs. 3 million.”
It has been initially planned to market KUV100 vehicle assembled in the island with the ‘Made in Sri Lanka’ tag.