(Commonwealth_ The Sri Lankan government is actively promoting the automobile component manufacturing industry as a key sector for economic growth. Plans are underway to boost exports from the current USD 200 million to USD 1 billion, according to Dimantha Jayawardena, Chairman of the Sector Advisory Committee for Automobile for the Ministry of Industries. The industry has overcome one of its toughest business cycles since 2020 and is now positioned to emerge as a major exporter.
The government is committed to supporting prospective assemblers and component manufacturers, aiming to increase jobs in the sector to 45,000 and establish Sri Lanka as a global automobile manufacturing hub by 2037. These efforts are part of the 20-year master plan for the automobile assembly industry.
The temporary suspension on motor vehicle imports in Sri Lanka has created a surge in opportunities for the local assembly of vehicles. This shift towards locally manufactured vehicles has opened new avenues for the automotive industry, providing a boost to domestic businesses and fostering economic growth.
To further support this trend, the Industrial Development Board (IDB) is planning to establish a research and development (R&D) and testing facility. This move highlights the government’s commitment to innovation and quality assurance, helping to elevate the industry’s standards and ensuring Sri Lanka remains competitive in the global automotive market.
The country’s strategic position along major trade routes linking the East and West has piqued the interest of global automotive brands, prompting them to consider investing in Sri Lanka. This inflow of foreign investment not only stimulates the local economy but also enhances the country’s reputation as a hub for manufacturing.
Furthermore, the growing preference among Sri Lankan consumers for locally assembled vehicles indicates a positive shift in consumer behavior. As more local manufacturers meet international quality standards, this trend will likely continue to drive growth and diversification within the industry, setting the stage for long-term success.
Sri Lanka’s automobile assembly industry is experiencing significant growth with the involvement of world-renowned brands such as Hyundai, Proton, BAIC, DFSK, Wuling, Mahindra, TATA, Bajaj, TVS, JMC, and Lanka Ashok Leyland. This demonstrates the favorable environment for investment within the country. The approval for assembling a diverse range of vehicles, including SUVs, cars, two-wheelers, double-cabs, trucks, and buses, has facilitated the diversification of the automobile assembly industry.
The local assembly of electric bikes by companies such as KD Rize, Dyno, and Senaro is further contributing to the growth of the sector. Additionally, over four assemblers, including JAC and FOTON, are preparing to start assembly in Sri Lanka, and by the end of the year, more than 30 assemblers will be operational in the local automobile assembly industry. These assemblers are required to provide a domestic value addition of more than 20% by using locally manufactured automobile components.
Local component manufacturers have undergone extensive product development and approval processes to meet the global original equipment (OE) standards upheld by international brands.
Since the launch of the Standard Operating Procedure (SOP) in 2021, over fifteen automobile and motorcycle assembly plants have been operating in Sri Lanka. Additionally, four more assembly plants are scheduled to begin operations in the next three months, and another eleven have been registered by the Ministry of Industries.
Sri Lankan government is dedicated to promoting and supporting the automobile component manufacturing industry, which will play a significant role in the country’s economic development. Through strategic investments in innovation, quality assurance, and partnerships with global brands, the industry is poised for continued growth and success in the coming years.
