Sri Lanka’s 2021 Budget heralds a new era for local automotive component manufacturing
The Sri Lanka Automotive Component Manufacturers’ Association (SLACMA) has reportedly welcomed the 2021 Budget, describing it as a ‘new era for local automotive component manufacturers.’
In appreciation of the efforts of the government of Sri Lanka to encourage entrepreneurs in the automobile industry engaged in vehicle assembly using locally-manufactured brand-new auto components, SLACMA President Dimantha Jayawardena has been quoted as saying in the Daily FT that the 2021 Budget had proposed local automotive assembly using 30% of locally-manufactured brand-new parts; promotion of local automotive products by giving them preference in Government tenders (domestic preference) and elimination of unfair competition for local auto manufacturers by preventing under-invoicing by importers.
SLACMA has submitted a 10-year master-plan to the Finance Ministry as a crucial step to take the local assembly industry and component supply to the next level, as they seek quality certification from their regional counterparts to boost growth.
The SLCMA has reportedly said it was currently in talks with seven world-renowned automobile companies, in order to supply locally-assembled and manufactured automobile components. Jayawardena has further expressed confidence in a better future for the industry in creating many jobs in the months to come.
The opportunities presented to the local automotive component manufacturers through the 2021 Budget has also opened a host of business/investment opportunities for foreign businesses as well. Sri Lanka has imposed many import restrictions on vehicles as well as spare parts to curb the outflow of foreign remittances. Therefore the local market for automotive components have to be met locally creating a business opportunity. Also, the facilities offered by Sri Lanka for industrial manufacturing could be used by foreign businesses to set up base here to export products to other markets as well. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have made it a business hub in the South Asian region.
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