Mahindra and Ideal Motors assist local component producers in assembling KUV100
View(s):Indian automotive major Mahindra and Mahindra Limited partnering with Ideals motors will open a vehicle assembly plant in Sri Lanka on August 17 at an investment of around Rs.3 billion with an eye on the export market.
The plant will be opened by Prime Minister Ranil Wickremesinghe and Indian High Commissioner Taranjit Singh Sandhu in the presence of CEO of Mahindra and Mahindra, Dr Pawan Goenka.
The plant in Welipanna in the Kalutara district, will be a joint venture between Sri Lanka’s Ideal Motors Ltd and Mahindra and Mahindra Group to assemble vehicles with over 35 per cent value addition.
Mahindra in a tie up with Ideal motors will manufacture the Mahindra KUV100, a mini 1,200 cc SUV, in this plant.
“This model has already hit the roads in India and over 100,000 KUV100s have been sold to date. In Sri Lanka the KUV will be sold at Rs. 3.2 million,” Founder and Executive Chairman Ideal Group, Nalin Welgama told the Business Times.
“We are planning to rollout 100 units per month and later expanded to 1,000 units per month. Our target per year is 40,000 units,” he disclosed.
“The assembly process of KUV100 will have over 35 per cent value addition in Sri Lanka using locally manufactured tyres from CEAT, batteries from EXIDE, seats, radiators, exhaust pumps and other material,” he said adding that local value addition would increase.
He noted that Ideal Motors has extended a helping hand to several local skilled component manufacturers to climb up the ladder and become value addition providers to Mahindra vehicle assembly operations in the island.
A company called Accolade owned by a small timer Dimantha Jayawardena is the manufacturer of seats of KUV 100 vehicles teaming up with the biggest manufacturer of auto seating in the world, Magna, which has a plant in India.
This match making was done by Ideal motors to help Mr. Jayawardena’s business be on par with international standards, Mr. Welgama said.
Accolade, newly branded as Ideal Auto Seating only imports the metal frame from India, and they are doing everything else from the forming and finishing to upholstery, he added.
Then, in terms of another value addition, CEAT is manufacturing a special tyre for KUV 100 and it has been able to extend the service to other models that use this same tire, he pointed out.
The exhaust of the vehicle is being manufactured by a small scale entrepreneur in partnership with the biggest muffler exhaust manufacturer in India, Mr. Welgama said.
The Exide battery company also extended its support by producing a battery in compliance with the technical specifications of this vehicle, he added.
An Automotive Vendor Park will be established at the Welipenna factory complex with the aim of exporting vehicle components for the international market specially the vast Indian market, he disclosed.
The company will assemble around 2,000 vehicles per year for the South Asian export market, Mr. Welgama noted.