Sri Lanka set to benefit greatly from Mahindra’s success
View(s):Sri Lanka’s automotive industry is to benefit greatly in the wake of Mahindra & Mahindra Ltd’s achievement of high market capitalisation in the Bombay Stock Exchange, Ideal Group, the Indian company’s local partner in a vehicle assembly joint venture(JV) said on Monday.
“With the shares of the Mahindra & Mahindra Ltd (M&M)surging more than 2 per cent to hit an all-time high, thus steering the automaker to join the club of Rs 1 lakh crore market capitalisation on the Bombay Stock Exchange, Sri Lanka can only but benefit as M & M will soon be setting up their automotive assembly plant, here in Sri Lanka,” said founder Chairman of the Ideal Group, Nalin Welgama.
The Indian company entered into a joint venture recently with Ideal Motors Ltd, a fully owned subsidiary of the Ideal Group, to assemble automotive vehicles in Sri Lanka.
Mahindra will hold a 35 per cent stake in the JV, while Ideal Motors will have a 65 per cent stake, he said adding that with this joint venture Mahindra will strengthen its presence in the country.
The plant will be built over the next one year under the expertise of the Mahindra team, and will incorporate global technology.
Mahindra & Mahindra Ltd is now bigger than the Tata group’s carmaker Tata Motors, in terms of market capitalisation, he added.
This was the first time that a genuine automobile manufacturer has entered the vehicle assembly arena, he told the Business Times noting that the Indian company will begin Mahindra ‘people’s car’ assembly in Sri Lanka with an initial investment of around US$15 to 20 million.
Ideal Motors will initially manufacture the Mahindra KUV 100 sports utility vehicle, the ideal ‘people’s car’ for Sri Lanka, he revealed.
Almost all the ground work has been finalised to set up the vehicle assembly plant in a two acre block of land in the Colombo suburbs probably in Horana, Mr. Welgama said.
Sri Lanka is one of Mahindra’s top three export markets, and the new facility will not only contribute to human capital development, but will also enable collective development of local automotive components manufacturers to international standards under the global expertise of Mahindra.
“This is a leap forward for the industry, adding value to the meaning of ‘Made in Sri Lanka’ and opening broader opportunities for national growth,” he said.