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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Maruti weighing car assembly in Sri Lanka as import duties soar

Maruti weighing car assembly in Sri Lanka as import duties soar

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Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
A R20-25 crore investment for a 30,000-unit Sri Lankan assembly plant has come up for discussion at the company’s board. The issue, however, is the high level of localisation (40%) required under Sri Lanka’s assembly norms, which are tough to meet because of low volumes.

“Even Osamu Suzuki, chairman of the parent Suzuki Motor Corp, has given his blessings to this plan. There is not much investment needed because of low mechanisation — it will basically be a sophisticated garage with a flexi-line for car assembly,” the official said.

Industry experts suspect that Sri Lanka’s move to set up high tariff barriers for imported vehicles could have been influenced by China to get a foothold in the country. This is because most of the car, two-wheeler and commercial vehicle segments is currently dominated by Indian players like Tata Motors, Ashok Leyland, Bajaj and Maruti Suzuki, but none have an assembly plant there. However, in October, Chinese car manufacturer Geely became the first to announce a $20 million assembly plant in Sri Lanka with local partner Micro Cars.

“There is virtually no vehicle manufacturing in Sri Lanka; so they are looking to encourage local investments,” an industry executive said. Mumbai-based utility vehicle major Mahindra & Mahindra is also reportedly talking to its Sri Lankan partner, Ideal Group, to set up a local assembly plant at an investment of Rs 11 crore.

Around 10% of India’s auto sector exports goes to Sri Lanka.
http://www.financialexpress.com/news/maruti-weighing-car-assembly-in-sri-lanka-as-import-duties-soar/1043930/2

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
This is great.There will be couple of other great business started sooner than later. specially from India. South indian companies has the more advantage than others since their cost of transport from Sri lanka is very less. i got info. from a very reliable source.

Indian upper middle clz population is bigger than entire US population.SO we will be having a great opportunity in coming decade..............

issue is that Our Labor cost is not that cheap so far. Sri lanka going to start import the required labour like Ausi and USA in coming year. Required LAW amendment being evaluated.
I dont understand why Sri lankan Gov. Cant start the Proposed Bridge which conned South India and Srilanka. Already ADB approved the Financial support.

This is what i always point out. Dont hate Sri lanka. It is very easy to double the out put for a small country.

All the best...........

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