President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe placed the foundation stone today for the construction of a vehicle assembly plant of the German auto maker Volkswagen in Kuliyapitiya.
The Board of Investment (BOI) inked the agreement with the German auto maker last year to set up the assembly plant in Sri Lanka at an investment of US$ 26.5 million.
Under the agreement the investor will assemble vehicles in the 1000 cc to 2000 cc category. These vehicles will be diesel powered and include passenger cars, Sport Utility Vehicles (SUV), Multi Utility Vehicles (MUV) or commercial vehicles.
Initially these vehicles would be marketed locally for a period of 3 years and thereafter the vehicles manufactured will be exported to overseas markets.
There is also a potential for export vehicles which would be petrol/electric/ hybrid vehicles to be built without the concessions that have been given for assembling diesel vehicles. The total value of this project will be an investment of US$26.5 million of which 21.5 million will be invested in fixed assets within a period of 24 months.
As Volkswagen is currently the world leader in Automobile manufacture, recently overtaking Toyota of Japan, this project is a very high profile one and a statement about Sri Lanka’s growing attractiveness as a destination for investment.
BOI is very keen to attract other leading automobile manufacturers into the country as the industry creates opportunities for the creation of local component manufacturers that can supply the building of a complex product such as passenger car. It is estimated that the assembly plant will be operational within a period of 30 months.
Volkswagen is a leading German automobile manufacturer based in Wolfsburg, Germany. The Company was founded in 1937 and produces cars, trucks and buses. The company revenue was Euro 197 billion in 2013. It is best known for Iconic models such as Beetle, Golf and Passat.
The uniqueness of the project would be the inflows of German advanced automobile technology into the country and creating of job opportunities for the local youth. (Colombo Gazette)