Vehicle assembly industry gears up for growth
Sri Lanka’s vehicle assembly and component manufacturing industries have grown by leaps and bounds, contributing significantly to the economy of the country.
It is set to expand significantly, with projections to increase exports of vehicles, two-wheelers, and components from the current US$800 million to $2 billion within five years,
This growth is expected to create 45,000 direct jobs, according to a senior official of the Ministry of Industries.
Governed by the Ministry of Industries’ Standard Operating Procedure (SOP), there are over 17 assembly factories producing an extensive range of vehicles including cars, SUVs, motorcycles, and electric three-wheelers.
There are another 17 investors waiting in the list to commence operations, reflecting potential growth in the industry, he disclosed.
The industry has succeeded in attracting renowned foreign automobile giants like Hyundai, TVS, Bajaj, Mahindra, TATA, Lanka Ashok Leyland, DFSK, Foton, JAC, JMC, Chery, Proton, Wuling, and BAIC.
The local component manufacturing sector now also manufactures quality automobile components like batteries, tyres, exhausts, bumpers, plastic and rubber items, metal components, wire harnesses, and liners.
These developments have made Sri Lanka a competitive presence in the regional automotive supply base. Looking into the future, stakeholders in the industry have grand plans to drive exports.
To keep the momentum going, industry players are calling for a favourable tax regime that supports locally assembled vehicles to draw in more investment and guarantee long-term viability.
The ministry has initiated discussions to address potential problems faced by the local value addition programme. Secretary to the Ministry Thilaka Jayasundara acknowledged the industry concerns but policy discussions were still in progress.
Companies that had made large-scale investments in assembling cars locally now stand in limbo. All of them were ready to initiate exports, but the policy u-turn on imports has raised question marks about the viability of the investments in the long run.
Post the 2021 announcement of the SOP for Local Vehicle Assembly and Component Manufacturing, investments worth Rs.16 billion had flowed into the sector with the expectation of earning $800 million annually in export proceeds.
This sector, which employs more than 5,000 technical personnel directly and 10,000 persons indirectly, proved its strategic value during the prohibition of vehicle imports by minimising the dependency on imports and saving foreign reserves.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!