Sri Lanka-India joint venture to initiate assembly of electric three-wheelers in newly built factory
Sri Lanka’s Ideal Motors and India’s Mahindra and Mahindra are reportedly initiating the assembly of Mahindra Treo electric three-wheelers in their newly built factory in Matugama.
Founder and Executive Chairman, Ideal Group, Nalin Welgama has been quoted as saying that Ideal Motors along with global brand Mahindra, have already inaugurated its first completely knocked down facility towards the assembly of automotive vehicles in Sri Lanka by Prime Minister Ranil Wickremesinghe.
The investment is US@ 50 million and the Mahindra Ideal Lanka Private Limited plant is a 65:35 joint venture between India’s Mahindra and Mahindra and Ideal Motors of Sri Lanka.
“Ideal Motors is proud to be a pioneer in setting up the first automotive assembly in direct partnership with automobile Mahindra to assemble KUV100, a compact SUV, with a production capacity of 5,000 units per annum,” he has said.
According to reports, apread over 10 acres, Mahindra Ideal Lanka would localise four components, namely battery (Exide), tyres (Ceat), seats and exhaust. The plant is expected to provide employment in the tune of 200 people directly and indirectly over the next two years. “We hope to release the first locally assemble car by the end of the year.”
“This new partnership would enable Sri Lanka to rise and manifest its glory through the ‘Made in Sri Lanka’ route.
“Import substitution is what we need for this market. Our focus is on locally sourcing more components and building a local industry,” Welgama has been further quoted as saying in the local media.
“We have at present, taken another step forward and will start the assembly of Mahindra Treo electric three-wheelers at this plant at its earliest and release them to the local market by December 2019.
Chief of International Operations Mahindra & Mahindra, Arvind Mathew, said earlier, that over the past two decades, Mahindra established a strong presence in Sri Lanka,” he has added.
OSL take:
Sri Lanka and India enjoy strong bilateral and trade ties that have been further strengthened by the free trade agreement (FTA). The ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by Sri Lanka have encouraged many Indian businesses to form joint ventures/partnerships with Sri Lankan businesses. Indian businesses/investors could use the preferential treatment enjoyed by India in Sri Lanka and explore further business/investment opportunities in Sri Lanka. Also, other foreign businesses/investors looking at doing business with India could explore the possibility of setting up base in Sri Lanka to engage with India.
| Article Code : | VBS/AT/04102019/Z_3 |