Top executives at Tata Motors, Bajaj Auto, TVS Motor and Mahindra Finance which have operations in Sri Lanka said it’s a challenging environment to do business but they remain committed to the Sri Lankan market, and are hoping that the situation will improve over the next 3-4 months, Times of India reported.

Experts said some companies may mull de-scaling operations or even pull out of the country if the situation doesn’t improve in the near to medium term.

The distributors said there has been a reduction in per day production as the political and economic crisis escalated in the country.

They said the ground situation is very different.

“We have to fend for ourselves and get foreign exchange to import kits and keep assembly lines running,” said Nalin Welgama,Executive Chairman of Ideal Group, a leading automobile dealer.

Import of vehicle kits is currently heavily restricted in Sri Lanka owing to the foreign currency shortage. Industry executives said that shipment of vehicle kits, including those of light commercial vehicles, trucks and buses, has declined sharply, as the country grapples with precariously low forex reserves and fuel shortage.

While Tata Motors has been exporting vehicle kits to distributors in Sri Lanka, others such as Mahindra & Mahindra, Ashok Leyland and TVS Motor have local assembly operations in the country.

“We have to go with the flow,” said Rakesh Sharma, executive director of Bajaj Auto.

“TVS, through its partnership with TVS Lanka, remains committed to the potential of the Sri Lankan market. While the current situation presents challenges, we are hopeful that they will be overcome,” said Rahul Nayak, vice president, international business, TVS Motor Company. “In the meantime we are committed to taking care of our existing customers with service and spare parts.”

Ramesh Iyer, vice chairman of Mahindra Finance, said the company is monitoring the situation and taking necessary precautions. “The situation in Sri Lanka has led to a natural slowdown in business operations. Our commitment to the Sri Lanka market is for the long term and we are hopeful that the situation will improve soon, he said.

People in the know said that with the collapse of the administration, there is very little financing activity at the NBFCs and most are instead giving loans against gold.

A spokesperson for Tata Motors said the company is hopeful that the country recovers from the crisis soon. The company sells a wide range of products in Sri Lanka–from the 750-kg Ace to the 45-tonne Prima trucks.

In January this year, the Sri Lankan government had approved the purchase of 500 buses from Ashok Leyland for its transport board. In August 2019, Mahindra & Mahindra had set up assembly operations in Sri Lanka with the Ideal Group to produce the KUV 100 mini sport utility vehicle (SUV) and Bolero Maxi pickup truck.