28 February 2022 08:36 am Views - 98
By Nishel Fernando
India’s Mahindra & Mahindra Limited (M&M), the first global auto major to invest in an assembly plant in Sri Lanka, remains upbeat on the country’s prospects, as it plans to gradually ramp up production while simultaneously increasing local value addition.
Mahindra & Mahindra Limited Automotive Sector Chief Executive Officer Veejay Nakra assured that Sri Lanka remains one of the key focused markets where it plans to bring in more investments to ramp up production gradually.
“The business environment keeps changing with time. There’s always good times and challenging times. Once you decide to become part of a market, then you need to be there for long haul. Of course, earlier, the environment was much easier in terms of importing vehicles and selling them. But today, there are number of challenges in relation to inflation, foreign exchange availability, value of the currency.
However, I think that’s where business entities come together to find innovative solutions. That’s exactly what we are doing here right now. The demand is right there in the market. It’s a matter of going through a period of time to see the economy stabilise,” he elaborated.
In July 2020, Mahindra introduced its first locally assembled vehicle, KUV100 NXT, an entry-level SUV, following the launch of the assembly plant in 2019.
According to Ideal Group Founder/Chairman Nalin Welgama, the output at the assembly plant is expected to reach two-thirds of its capacity during the current financial year.
In terms of local value addition, he noted that plans are underway to invest in an equipment to locally manufacture polycarbonate (PC) and acrylonitrile butadiene styrene (ABS) bumpers in meeting with Mahindra’s quality parameters.
He pointed out that the local component manufacturer has been able to increase the quality of their products to global standards with the support extended by Mahindra and their partners.
Similarly, Nakra also noted that quality remains the key focus for both entitles, as they gradually ramp up the production.
“We are not in a hurry to ramp up production, just to produce numbers. We want to stabilise the process. When all the quality parameters meet the standards, then we will look into increasing capacity. I believe this year will be a good year for us moving ahead,” he added.
With the introduction of Standard Operating Procedure (SOP) streaming the vehicle assembly process last year, Welgama noted that at least 10 entitles are now preparing to set up vehicle assembly plants, where some companies have already approached Mahindra Ideal Lanka Automotive Assembly Plant to secure certain components.
Moreover, he urged the local component manufacturers to explore opportunities in India’s US $ 50 billion automotive market by utilising the Indo-Sri Lanka Free Trade Agreement.
Under its road map, Mahindra Ideal Lanka Automotive Assembly Plant also plans to export certain components to entitles in Mahindra’s vast network, once it passes Mahindra’s quality audit.