Vehicle assembly plants for Maruti Suzuki India and Land Rover Defenders stalled
Sri Lanka has restricted the setting up of vehicle assembly plants by local companies in joint ventures with foreign automobile manufacturers shattering the plans of Maruti Suzuki India and the local agent of Land Rover Defenders.
The government will not give permits to open vehicle assembly plants in the country as the local inputs for such projects are minimal, a senior official of the Finance Ministry said.
A directive has been issued to the Board of Investment (BOI) to suspend the granting of approval and issuing permits to local and foreign companies to launch such projects, he revealed.
This was confirmed by Investment Promotion Minister Lakshman Yapa Abeywardena at a media conference saying that the BOI will not allow assembly plants of foreign manufacturers unless there is local input.
However he said a committee has been appointed to consider the percentage of local inputs or whether to totally ban this kind of manufacture and a final decision will be taken after the report of this committee.
SML Frontier Automotive (Pvt) Ltd has suspended its US$1 million assembly plant for Land Rover Defenders in Hambantota District as it has not received the permit from the government, Managing Director of the company Sheran Fernando told the Business Times.
Plans had been in place to import machinery from the UK and also bring down British Land Rover engineers to assist in the production process.
Indian automobile manufacturer Maruti Suzuki India is also dropping its planned assembly plant with local agent, Associated Motorways (AMW), an official said.