Sri Lanka - A joint venture (JV) has been established between the two companies in order to assemble vehicles at a new plant in Kalutara. Mahindra holds a 35% stake in the JV, while Ideal Motors holds 65%.
Although Ideal Motors has been distributing Mahindra vehicles in the country for nine years, the Indian OEM believes that the new JV will help it expand its presence in the growth market. "Sri Lanka is one of Mahindra's top three export markets, and today’s announcement with Ideal Motors builds the foundation for newer opportunities for both of us in the island nation," commented Sanjay Jadhav, vice president and head of international operations in South Asia, Mahindra & Mahindra.
"We have a strong vision for growth in Sri Lanka and this move is an integral part of that plan. The changes faced by the automotive industry today are triggered by the accelerated rise of new technologies, consumer needs and sustainability in policies, we see the need to anticipate new market trends, explore alternatives and build powerful synergies in this island nation."
For Nalin Welgama, founder and executive chairman of Ideal Group, the news is extremely positive for the country's automotive industry: "The new facility will not only contribute to human capital development, but will also enable collective development of local automotive components manufacturers to international standards under the global expertise of Mahindra. This is a leap forward for the industry, adding value to the meaning of ‘Made in Sri Lanka’ and opening broader opportunities for national growth."
Jadhav previously outlined Mahindra's plans to assemble vehicles in Sri Lanka back in February 2017. At the time, he referred to rising demand for the company's cars as a driving factor.