India’s Mahindra and Ideal Motors set up JV to assemble vehicles locally
Total investment towards assembly plant estimated at Rs.2.5 to 3bn Ideal Motors to hold 65% of shares of JV and Mahindra to hold 35% Plant to be set up in Kalutara; production to start end of this year
At the signing of the joint venture between Ideal Motors Ltd and Mahindra and Mahindra Ltd (India) to begin assembling vehicles in Sri Lanka, it was highlighted that vehicles manufactured locally will see true value addition.
“One of the main benefits that will reap in the upcoming plan to manufacture vehicles locally is that the product will see true value addition from Sri Lankan soil in terms of manufacturing of components, as well as adding new technology,” stated Ideal Motors Automotive Director Chaminda Wanigaratne at a press conference held to unveil the joint venture in Colombo, yesterday.
The total investment for this venture is estimated somewhere between two and a half to three billion rupees, according to Ideal Group Chairman Nalin Welgama. Mahindra has attested to hold a 35 percent stake of the joint venture, while the remaining 65 percent stake will be held by Ideal Motors.
The new facility for the assembly plant is located at Kalutara, with production looking to start towards the end of 2018. The plant will be developed over the next year under experts from Mahindra, who will incorporate advanced technologies.
Welgama says that the first line of automobiles to be produced will most likely be small cars, although he also stated that the final decision of the type of car to start assembly will be announced in weeks to come.
Welgama opined that this is the first time that an internationally renowned automaker is partnering a Sri Lankan automotive company, and said that this is the right path, considering the stupendous growth Mahindra has seen in the Sri Lankan market.
“We have been exploring the possibilities of setting up a local manufacturing facility, because we believe that when we are working with our local partners in the country, we feel that it is not just about doing business, but about how we can contribute in the country for the people,” said Mahindra and Mahindra Ltd (South Asia) AFS International Operations Head and Vice President Sanjay Jadhav.
“We are very happy that this relationship is now going to the next level. Mahindra will be in joint venture with Ideal Motors, manufacturing our automotive range of products in the country, which will really help us serve the customers better, and we assure you that as we have been serving the Sri Lankan customers the best, we will continue to do that and continue to delight Sri Lankan customers,” Jadhav concluded.