India’s automobile leader, Mahindra & Mahindra (M&M) will launch the island’s first automobile manufacturing and assembly plant with an investment of Rs. 3 billion in Welipenna next month.
The project will be launched on August 17 in collaboration with Mahindra’s local partner Ideal Group, with an eye on the export market.
The joint venture project for the assembly and manufacture of Mahindra vehicles will commence with the KUV100 cars and will expand to manufacturing other Mahindra vehicles according to the needs of the local market.
“We will first start with the KUV100 cars and then migrate to the other range of Mahindra vehicles which suits the Sri Lankan market. We will be looking at increasing our initial investment as the market expands,” Ideal Group Founder Chairman Nalin Welgama told the Business Observer.
He added there will be over 100 jobs that will be created initially and thereafter, more employment opportunities will be created with the expansion of the market.
The trial run of the state-of-the-art vehicle assembly plant has been scheduled for this week prior to the launch mid next month, in the presence of the Managing Director of Mahindra and Mahindra India, Dr. Pawan Goenka.
“We are excited about Mahindra’s new venture which will open up new vistas for the automotive industry in Sri Lanka,” Mahindra Automobiles Chief of International Operations, Arvind Mathew said.
The Welipanna plant will help the transfer of technology to Sri Lanka.
“What we see as more important in the joint venture with a globally renowned brand is the technology transfer to the country which will be recognised hereafter as a location for vehicle assembly and manufacture,” Welgama said.
The ground breaking venture is a shift from the country’s first assembly of Fiat and Mazda by acclaimed businessman Upli Wijewardene which was known as Upali Fiat and UMC Mazda in the late 1960s and early 1970s.
“Upali Wijewardene received CKD (Completely Knock Down) kits from Mazda and assembled it, which was a great achievement at that time, but things started to wither away as no auto major supported him which made him end up as an assembler. Today, we are moving from assembly to manufacture-assembly by a well-known global brand - Mahindra,” Welgama said.
Mahindra and Mahindra has factories in Egypt, South Africa and the USA. The Welipanna plant will be the latest addition to the plants of Mahindra.
“The Mercedes Benz C class is manufactured in South Africa and Toyota double cabs in Thailand but they had the same quality as Japanese products. Similarly, the Welipanna plant will be a full-fledged Mahindra plant which will manufacture according to quality standards since there will be no direct involvement with auto majors supplying kits,” Welgama said, adding that Mahindra has identified four inputs going into the assembly of the proposed car such as complete seating, exhaust, automotive battery and tyres.
He said Sri Lanka’s seat manufacturer Dimantha Jayawardena of Accolade after being introduced to Magna India, the world’s biggest manufacturer of auto seats was able to boost his standards to world class level. Similarly, an exhaust manufacturer in Sri Lanka was able come up to world standards after collaborating with a leading exhaust manufacturer in India.
“CEAT tyres did not have a product for KUV100 cars. Mahindra worked with CEAT India and a tyre to suit the KUV100 was made in Sri Lanka. Exide batteries too collaborated with Mahindra enabling the company to reach higher standards.
These input suppliers could supply to the Indian market through the Free Trade Agreement between Sri Lanka and India.