Mahindra & Mahindra (M&M) inaugurated its Sri Lankan automotive assembly plant at Welipenna near Colombo on Saturday.
Called Mahindra Ideal Lanka Private Limited, this plant is a 65:35 joint venture between M&M and Ideal Motors, Sri Lanka. It has been is set up at a cost of Lankan Rs 200 crore (approximately Indian Rs 80 - 81 crore).
This JV will assemble the KUV 100 compact SUV and will have a production capacity of 5,000 vehicles per annum. Sri Lanka currently sells about 36000 vehicles a year which includes both new and refurbished /pre-owned ones. But new vehicles constitute only 20 per cent of the total vehicles sold. There is no local manufacturing and Sri Lanka is dependent only on imported vehicles with import duties ranging from 100-300 per cent.
Given this backdrop, the setting up of this assembly plant assumes significance. The Welipenna facility is also the first assembly plant in Sri Lanka which will source certain components locally. The unit will employ about 100 people initially. The petrol K6+ variant of the KUV 100 will be rolled out and is expected to be priced at around Lankan Rs 32 lakh. (approximately Indian Rs 12-13 lakh).
Prime Minister Ranil Wickremasinghe who inaugurated the plant said that encouraging local manufacturing was one of the main features of the Sri Lankan government. He pointed out that Sri Lanka had a lot of export potential for locally manufactured products to neighbouring countries.
Speaking on the occasion, Nalin Welgama, Chairman, Ideal Motors said that conforming to the government requirements of 30 per cent local value addition, seats, exhaust systems, tyres and batteries will be locally produced for the KUV 100. While seats and exhaust systems will be supplied by local players who have been trained to meet the required quality standards, the Sri Lankan arm of Ceat and Exide Industries will provide the tyres and the batteries respectively. “Sri Lanka has a good talent pool and a lot of local component manufacturers.
This is a splendid opportunity for us to raise our quality standards to global levels”, he said.
In future, the venture is looking to source radiators and rubber components from Sri Lanka.
Recalling M&M’s distribution partnership with Ideal Motors for commercial/off- road vehicles over the last many years, Dr Pawan Goenka, MD, M&M, said that Ideal Motors had established the Mahindra brand very well in the country. This will help the KUV 100 compete with other international car brands available in the island nation, he added. M&M has over 75,000 commercial vehicles running in Sri Lanka currently and has 400 touch points.
Given the encouraging policy eco system for electric vehicles in Sri Lanka, Dr Goenka hoped that M&M would make a big contribution in this segment too. “We have sold about 70 e2o Plus in Sri Lanka and are currently test marketing the Treo electric three –wheeler. In aboutsix months, we will be launching the electric version of the KUV 100. We will evaluate if we should assemble this in Sri Lanka as well”, he said.
(The writer is in Colombo on the invitation of Mahindra & Mahindra.)
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