India’s automobile manufacturer Mahindra & Mahindra has started a vehicle assembly plant near Colombo in Sri Lanka. The company announced on Saturday the opening of its first plant in Sri Lanka.
Sri Lanka at presents sells around 36,000 vehicles a year, both new and refurbished ones. This is the first assembly plant in Sri Lanka, which will also source certain components locally. Sri Lanka is dependent on imported vehicles with, import duties ranging between 100-300 per cent.
It is known as Mahindra Ideal Lanka Pvt Ltd, the plant is a 65:35 joint venture between M&M and Ideal Motors, Sri Lanka. It has been set up at a cost of Rs 80-100 crore.
“This assembly plant in Sri Lanka has been started in association with Idol Motors,” the company said in a statement. The plant today produced its first vehicle. This vehicle is a sports utility vehicle (SUV) KUV100. In the next three years, the plant will produce vehicles of different brands of the company. ”
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Managing Director of the company Pawan Goenka said, “The inauguration of this assembly plant is a milestone for Mahindra on its way to the Sri Lankan market.” Sri Lanka is an important strategic market for us and we are now ready to supply products on time according to local needs. ”
Sri Lankan Prime Minister Ranil Wickramasinghe, who inaugurated the plant, said encouraging local manufacturing was one of the main features of the Sri Lankan government. He pointed out that this was just the beginning and that the country had a lot of export potential for locally manufactured products to neighboring countries given its location.
Mahindra Ideal Lanka will assemble the KUV100. It has a capacity to produce five thousand vehicles annually. The company will manufacture batteries, tires, seats and exhaust locally. The plant is expected to employ 200 people directly and indirectly in the next two years.
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“Inauguration of this automotive assembly plant is a significant milestone for Mahindra’s foray into the Sri Lanka market. Sri Lanka is a key strategic market for us and we are now fully equipped to deliver products customized to local needs, on time,” Mahindra & Mahindra Managing Director Pawan Goenka said.
Speaking on the ocassion, Nalina Welegama, Chairman, Ideal Motors, said conforming to the government’s requirement of 30 per cent local value addition, seats, exhaust systems, tyres and batteries for the KUV 100 would be locally produced.