Joint venture vehicle assembly plant to manufacture small passenger cars to be set up in Sri Lanka by Indian automaker
Indian automaker Mahindra and Mahindra Limited (M&M) is to form a joint venture with Sri Lanka’s Ideal Motors to set up a vehicle assembly plant that would most likely make a small passenger car for the rural Sri Lankan rural market.
Nalin Welgama, founder and Executive Chairman of Ideal Group, the sole authorized distributor for Mahindra vehicles and motor cycles in Sri Lanka has reportedly said that the total investment in the project will be around Rs. 2.5 – 3 billion.
According to local media reports, the joint venture, in which M&M has said it will invest up to Rs. 250 million, is in the final stages of deciding on the vehicle which will be designed by M&M.
The plant will be set up in the Kalutara district with production likely to start by November or December this year, Welgama has told a news conference recently.
“The first products might not be an LCV (light commercial vehicle) but a small car,” Welgama has said.
“It has to be a small car at an affordable price to the market. Studies show we can sell at least 100 cars a month in the first year,” he has been quoted as saying.
Mahindra and Mahindra’s Vice President, Head of international operations (South Asia), Sanjay Jadhav has reportedly said sales of their vehicles were good because of the focus on after sales service in their partnership with Ideal Group.
“Ideal Motors has an excellent network across the island to serve customers which is helping us do better. We are now taking this relationship to the next level with the assembly plant.”
With over 65,000 Mahindra vehicles in Sri Lanka, mainly in rural areas, and a good after sales service, the joint venture is confident of being able to sell its new product, Welgama has added.
The joint venture to set up a vehicle assembly plant between two companies from Sri Lanka and India has created the opportunity for other local companies to seek similar partnerships with business entities in India or any other part of the South Asian region.
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