Ideal Group and Mahindra to make vehicle components locally

Mahindra & Mahindra, Ideal Group and Lanka IOC officials including Aravinda de Silva (third from left), Lanka IOC Managing Director Shyam Bohra (second from left) and Ideal Motors Director Automotive Chaminda Wanigaratne (fifth from left) at the launch of Mahindra Genuine Oil – Maximile in Sri Lanka
Pic by Pradeep Pathirana

By Nishel Fernando
India’s leading auto manufacturer Mahindra & Mahindra Ltd and Sri Lanka’s Ideal Group (Pvt.) Ltd plan to setup a component manufacturing centre to complement their plans to set up a vehicle assembly plant in Sri Lanka.

The two firms entered into a joint venture to set to setup a vehicle assembly plant in Kalutara earlier this year, with an investment of Rs.2.5 billion. The construction of the plant commenced this September. 

Speaking at an event to mark the relaunch of Mahindra Genuine Oil – Maximile in Sri Lanka, Ideal Group (Pvt.) Ltd Deputy Chairman Aravinda de Silva said that leading automobile manufacturing nations such as India, Japan and China entered into manufacturing of motor vehicles with component manufacturing.

He also noted that component manufacturing would help to surpass the 35 percent local value addition rate imposed by the government. 

“When we commence the assembly process, we need to have 35 percent local components. We have already identified three areas— seats, batteries and tyres. With that we will locally assemble Mahindra vehicles,” he said.

de Silva also emphasised that Sri Lanka could commence export of these components to regional nations, if the country is able to ink the proposed free trade pacts with Bangladesh and strengthen the existing free trade agreements with India and Pakistan. 

“I’m sure this industry could be similar to the garment industry, which has brought a lot of success and foreign exchange to the country over the past several years,” he said.

He noted that around 70,500 components go into the production of a Mahindra SUV and said Ideal Group plans to gain a considerable market share in most of the components. 

Meanwhile, Lanka IOC Managing Director Shyam Bohra announced that Lanka IOC would commence blending Mahindra Genuine Oil – Maximile in Sri Lanka within two to three months. 

Mahindra Genuine Oil – Maximile was introduced to the Sri Lankan market three months ago as a collaborative effort by Mahindra & Mahindra Ltd, Ideal Group (Pvt.) Ltd and Lanka IOC.

de Silva revealed that sales of Maximile has reached 90,000 litres during the past three months and said plans are underway to reach 90,000 litres per month in the future. 

Bohra said that once Lanka IOC commences the blending of Maximile, there’s a potential to export the lubricant to regional markets. 

Ideal Motors Director Automotive Chaminda Wanigaratne said that Ideal Motors has a solid 62,000 customer base in Sri Lanka as the company has sold approximately 62,000 Mahindra vehicles in Sri Lanka since 2009.

Maximile products are tailor-made for Mahindra & Mahindra vehicles and also compatible with diesel engines, which are equipped with CRDi engines. 

Wanigaratne said that as Sri Lanka is shifting to Euro 4 standards and all Euro 4 diesel engines are equipped with CRDi engines, Maximile could attract a significant portion of diesel vehicle owners in the country.

Mahindra has an over 50 percent market share in the above one tonne vehicle category in Sri Lanka, while it has a 35 percent market share in the below one tonne vehicle category.