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Mahindra & Mahindra (M&M), along with its local partner in Sri Lanka Ideal Motors, has set up the island nation's first passenger car assembly plant.
The Indian carmaker has set up a joint venture with Ideal Motors, its dealer partner in Sri Lanka for 10 years. The 65:35 JV between Ideal Motors and M&M is christened Mahindra Ideal Lanka Private Limited, which will operate the assembly plant at Welipenna, about 60 km from Colombo. The vehicle assembly unit will also see a vendor development park coming up in the vicinity.
Inaugurated today in the presence of the Prime Minister of the Democratic Socialist Republic of Sri Lanka, Ranil Wickremesinghe, the Indian High Commissioner to Sri Lanka, Pawan Goenka, MD, M&M Ltd, Arvind Mathew, chief of international operations, M&M among others, the assembly plant is set up with an investment of 2 billion Sri Lankan rupees.
The unit will have an installed yearly capacity of up to 5,000 units and will provide direct and indirect employment to about 200 people over the next two years.
The CKD (completely knocked down) unit plant, which has a clear operational roadmap for the next three years, will roll out several vehicles starting from M&M's compact sports utility vehicle (SUV) KUV100. The first vehicle was rolled out today. The local assembly operations include localisation of four components such as tyres, batteries, exhausts and seating systems. While tyres will be supplied by Ceat tyres, the automotive batteries will come from the battery maker Exide, both Indian companies with footprints in Sri Lanka.
"Sri Lanka is one of the top strategic markets for M&M. More than 75,000 Mahindra vehicles ply on the roads here and we have a strong network of 400 touchpoints across the country, thanks to Ideal Motors. Since there is a government push for electric vehicles in Sri Lanka, we have already planned two EVs for this market. We will bring our electric three-wheeler here," said Goenka.
The Sri Lanka passenger car market's size is in the range of 32,000-35,000 units per annum, of which new car sales account for only 25%.