Foreign cars to be assembled here

The government is pulling out all the stops in a bid to attract foreign automobile majors to assemble cars in Sri Lanka. At least two rounds of discussions were scheduled during the week to iron out certain impediments and improve the feasibility of such a move.

Kumara Welgama, Minister of Industrial Development, highlighted one significant change that would attract the motor industry to invest here.

Foreign manufacturers have already rejected the minimum local value addition norms of 30% that had been stipulated. The local auto ancillary industry is at a nascent stage, they say, and components are not available to that extent. They want the norm be relaxed to 15%, which would make investment worth considering because tyres, batteries and upholstery are available locally.

Indicating a refreshing sense of flexibility, Welgama expresses willingness to concede the concession. He says, “We can gradually increase the local value addition to 30% later”, as ancillary industries develop and grow. Another positive fallout of such a move would be the generation of employment at the assembly units that would be set up.

It is expected that, once that is approved, motor companies would seriously consider biting the bait. There are a few companies that are already lining up to set up assembly lines. These include Nissan Motor Company and some Korean carmakers – including SsangYong, which launched the ‘Kyron’ last year. Hindustan Motors is also in contention. The company’s most visible product is the Ambassador, which has been ruling Indian roads for generations and is a quaint sight on Indian roads even today. Originally based on the Morris Oxford (UK, 1948), its dependability, spaciousness and comfort factor have made it Indians’ most preferred car for generations.