Ideal Motors’ small car, not named yet, is to be made in collaboration with India’s automobile behemoth, the US$ 19 billion Mahindra and Mahindra (M and M), at a plant in Kalutara district south of the capital Colombo.
This will be the second Sri Lankan attempt to make a car in the country, the first being the late business magnate Upali Wjewardene’s UMC Mazda and Upali Fiat in the 1970s.
But there is a vital difference between Upali’s cars and what Ideal Motors wants to do. While the earlier plants were assembly units putting together imported parts brought down in a completely knocked down condition, the Ideal Motors’ car will be an indigenous one up to at least 35% eventually.
The parts will be made in-house or in a Vendors’ Park located near the main factory.
Briefing the media about the Joint Venture here on Tuesday, the Chairman of Ideal Motors, Nalin Welgama, said that the recently inked JV, will initially turn out 100 small cars per year and then graduate to Light Commercial Vehicles to serve the rural market, where LCVs are in heavy demand.
The LKR 3 billion (US$ 19.2 million) Joint Venture, in which Ideal Motors will have a 65% stake and M and M the rest of the 35%, will also involve technology transfer and training to personnel.
“The Vendors Park will have units from the Mahindra and Mahindra stable of auto parts manufacturers in India as well as locally owned units. The local units will work under the supervision of M and M experts to ensure international standards,” Welgama said.
“The idea is to give a boost to industrialization in Sri Lanka and train its entrepreneurs and employees to work at the higher reaches of automobile technology,” the Chairman of Ideal Motors said.
The cars and other vehicles made in the Sri Lankan plant will be exported, as Sri Lanka is too small a market to absorb the entire production.
And one of the first markets to be serviced will be the Indian one next door, Welgama said.
Describing the venture in cricketing terms, Aravinda de Silva, the cricketer turned Vice Chairman of Ideal Motors, said that if the JV succeeds, it will be a game changer in Sri Lankan economic history, akin to the Sri Lankan cricket team’s lifting the World Cup.
The relationship between Ideal Motors and M and M was established in 2009, when the Sri Lankan company became agents for the M and M stable of vehicles in the island.
Due to the excellent relationship between the two entities and good after-sale-service, Ideal Motors’ share is certain sections of the Sri Lankan automobile market went up from 5 to 8 % in 2009 to 50% now, Welgama said.
At present there are 65,000 M and M vehicles on Sri Lanka roads.
As M and M has a penchant for skills development and training, it has, in collaboration with Ideal Motors, started training “quality workers” to work on the latest cars.
The first batch of 25 workers are being trained now. Eventually, 200 quality workers will be trained every year.
In fact, in 2012, Ideal Motors set up a fully recognized automotive and management training school with gives NVQ level 4 certification.
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