BY SANATH NANAYAKKARE

A policy framework (SOP) is to be unveiled on 15 March 2021, to gradually move away from importing vehicles to Sri Lanka, and simultaneously create a solid ecosystem for the assembly of automobiles and facilitate original equipment manufacturer (OEM) status for local auto component manufacturers.

The Ministry of Industries has designed this SOP (Standard Operations Procedure) to empower the vehicle assembly industry having taken on board the views, experiences and input of local automotive companies that have already set up their assembly lines in the country.

Ideal Motors is one such company which has set up its Mahindra Ideal vehicle assembly Plant in Welipenna, Kalutara. The Island recently had an interview with Ideal Group Founder and Executive Chairman Nalin Welgama, to learn about the reasons why the SOP document had been created and whether it would help create a level playing field for any potential investor or another automotive company to venture into the industry.

“The SOP to which we have given our input will entail a mechanism to ensure greater clarity, transparency and fairness for any potential investor or another automotive company in Sri Lanka to enter the auto assembly industry,” Welgama said.

“It will ensure not only a level playing field for all potential investors and existing players entering the vehicle assembly sector, it will also remove any barriers, obstacles and bottlenecks that hinder their operations. The Cabinet approval has been given to Minister of Industries Wimal Weerawansa to unveil and implement the SOP governing assembly of vehicles in Sri Lanka. In fact, this would be a policy framework and a quality manual on national and international standards for automobile assembly in Sri Lanka as a sustainable alternative to importing vehicles to Sri Lanka in line with the ongoing import ban on automobiles.”

The Ideal Group founder added that Upali Wijewardena, the pioneer in auto assembly in Sri Lanka, had been the first Sri Lankan who set up an assembly plant under Upali Group to assemble Fiat and Mazda cars in the country. At the time, the company didn’t have a direct connection with the parent companies and thus a globally recognized automotive manufacturer was not here.

“Otherwise, there would have been R&D and technology transfer to make the assembly operations viable in the long term,” he said.

Welgama said that since then two other companies have engaged in similar assembly operations here. However, neither have had any direct partnership with a global automotive giant nor was there an investment from an overseas parent company or the required R&D and tech support. They also didn’t do car assembly on a daily basis as an established production base, he said.

“They brought down kits from time to time, assembled them here and released to the market. That was not a sustainable model as producing a reliable car is a complex workmanship. In contrast, the approach we have taken at Mahindra Ideal car assembly plant in Welipenna, has addressed these issues in a practical way. Mahindra & Mahindra which enjoys its presence across 100+ countries and operates in key industries have partnered with us making a 35% equity in the joint venture. And they have committed themselves to providing our youth with the necessary tech skills to assemble vehicles of global specifications and standards in Sri Lanka. That is just one part of the transformation we have been able to achieve for Sri Lanka as a result of our partnership with Mahindra. Secondly, and most importantly, Mahindra-Ideal partnership has paved the way for emerging automobile component manufacturers in Sri Lanka to make their presence in the global supply chain as original equipment manufacturers (OEM).”