Maruti Suzuki’s plans to set-up plant in Sri Lanka shattered

Automobile leaders in the Indian car market, Maruti Suzuki India Limited (MSIL) were exploring avenues to set up an assembly unit near Colombo to meet emerging needs of the Sri Lankan market. The company was in the process of undertaking feasibility study to bring these dreams into reality, but these dreams have now been crushed due to non receipt of Government sanctions.

maruti suzuki sri lankaMSIL along with local agents Associated Motorways (AMW), had plans of opening a vehicle assembly plant in a joint venture. This was first reported back in 2012. But, now the Government of Sri Lanka has  restricted setting up of assembly plants with local companies in association with foreign automobile manufacturers stating that local inputs for such projects were at a minimum. Board of Investment has also issued a directive suspending granting of approvals and the issue of permits to both local auto manufacturers and their foreign counterparts.

Apart from Maruti, SML Frontier Automotive Pvt. Ltd also suspended a US$1 million assembly plant planned by Land Rover Defenders in Hambantota District due to non receipt of government permission. Where Land Rover Defender’s were concerned, plans were already made to bring in machinery from the UK while engineers from Land Rover were also expected to come down to Sri Lanka to offer their expertise in the manufacturing process.

Despite the fact that these directives have thrown a spanner in the works where MSIL and Land Rover Defender is concerned, there is a committee set up to consider to what extent local inputs should be pegged at and whether there should be a total ban on such investments. The final decision is pending after the committee submits its report.

via Sunday Times