M&M sets up first car assembly plant in Sri Lanka with Ideal Motors

M&M sets up first car assembly plant in Sri Lanka with Ideal Motors

 Towards the end of 2019, automobile loving Sri Lankans will see something they have been longing to see a locally manufactured “Sri Lankan” car vying for road space with international brands.

Sri Lanka’s Ideal Motors has teamed up with India’s automobile behemoth the US$ 19 billion Mahindra and Mahindra (M and M), to make a range of vehicles ,starting with a small car, at a plant in Kalutara district south of Colombo. This will be the second Sri Lankan attempt to make a car in the country, the first being the late business magnate Upali Wjewardene’s UMC Mazda and Upali Fiat in the 1970s. But there is a vital difference between Upali’s cars and what Ideal Motors wants to do. While the earlier plants were assembly units putting together imported parts brought down in a completely knocked down condition, the Ideal Motors’ car will be an indigenous one up to at least 35% eventually. The parts will be made in-house or in a Vendors’ Park located near the main factory.

M&M sets up first car assembly plant in Sri Lanka with Ideal Motors

Briefing the media about the Joint Venture here on Tuesday, the Chairman of Ideal Motors, Nalin Welgama, said that the recently inked JV, will initially turn out 100 small cars per year and then graduate to Light Commercial Vehicles to serve the rural market, where LCVs are in heavy demand. The LKR 3 billion (US$ 19.2 million) Joint Venture, in which Ideal Motors will have a 65% stake and M and M the rest of the 35%, will also involve technology transfer and training to personnel. 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. “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%. At present there are 65,000 M and M vehicles on Sri Lanka roads.

As M and M has a penchant for skills development and training, it has, in collaboration with Ideal Motors, started training “quality workers” to work on the latest cars.