Maruti Suzuki, India’s largest car manufacturer has announced its plans to set up a new manufacturing plant in Sri Lanka. The carmaker plans to commence operation in the southern island country by 2014 and is making the due feasibility studies in the region.
Mr. R.C Bhargava Chairman Maruti Suzuki stated that the carmaker is currently in talks with the Sri Lankan government regarding regulatory clearances related to the new facility and the operations. He added that the studies will be finished by the end of the year 2013 and will enable the carmaker to understand the feasibility of manufacturing automobiles in Sri Lanka.
Mr. Bhargava stated that the carmaker will need to ensure that the new company stays economically viable and shouldn’t turn into a loss making venture. Maruti Suzuki is willing to wait 2-3 years before the new venture in Sri Lanka breaks even in terms of revenue.
The Sri Lankan government charges a higher tax on car imports of completely built units while a lower tax on auto components. Mr. Bhargava states that this indicates that the government is open and encouraging to local manufacturing.