Automotive Component Manufacturing Association gears to empower Sri Lanka

With the current Government’s integrated car manufacturing policy the automotive components manufacturing in Sri Lanka is to reach a phenomenal growth during the next 10 years. The newly formed Sri Lanka Automotive Component Manufacturing Association comprising of large, medium and small scale automotive component manufacturers is endorsed by the Ministry of Industries and Commerce. SLACMA in short, as an association has committed to provide 45,000 jobs within the next 10 years if the government policy on automotive component manufacturing stays consistent.

Prime Minister Ranil Wickremesinghe has requested all industrial clusters to provide new employment to one million Sri Lankans. Our industry is one of the highly technologically advanced industries among the clusters. If we take the region, Thailand, Malaysia, India and Pakistan, has stronger industrial policies to protect automotive component manufacturing. Sri Lanka whereas lacks way behind. This is because previous governments never understood that mobility and transportation would automatically create an industry of replacement auto-parts.

SLACMA convener Dimantha Jayawardena has for the last eight years canvassed regarding this issue. He has highlighted that every moving vehicle has wear and tear, and the parts have to be replaced during the life time of a vehicle. Each vehicle which runs 100,000 km will minimum replace Rs. 400,000 worth of parts and currently 100% of these parts are imported. At the moment, the Ministry of Finance under the leadership of Minister Ravi Karunanayaka is actively involved promoting and devising an auto component manufacturing strategy and policy in Sri Lanka and has promised to device a 20 year master plan to promote our local automotive component manufacturing industry. 

If you consider the Indian automotive component policy, the policy was devised 60 years back which has resulted in an auto component industry of $ 38.5 billion in the year 2015. Indian auto component exports alone account $ 10.2 billion with a CAGR of 15% annual growth rate. If you take by one mere example, 40% of all US trucks are running on Crank Shafts manufactured in India. India was able to promote export by nearly protecting the manufacturers for around 20 years as that gave ample time for manufacturers to obtain international quality standards and resulting in joint ventures with original equipment manufacturers such as BOSCH – German, Delphi – UK, Delco – India and Magna – North America. 

Sri Lanka will have to work over night to match the policies regarding auto component manufacturing and SLACMA has promised the Government of Sri Lanka and the members obtain global quality certifications and to export Sri Lankan made auto components to emerging markets including Africa. SLACMA also has initiated a project to identify next generation automotive technologies through a competition which is aimed at students of Sri Lankan universities. 

These areas will consist of latest design innovation and electric mobility to develop next generation of high tech components for the global market. SLACMA is consistently pushing for Regional Corporation to provide our local manufacturers to help them in signing joint ventures with overseas companies which will help in technology transfer. So as to help the current government in saving foreign exchange and to achieve export targets.

With the Government pushing for import localisation and 30% value addition in local vehicle assembly many member companies are directly providing parts to the two vehicle assembly license holders UEL and Micro Cars Ltd. This year’s budget alone has created 2000+ new jobs in the industry and the two local assemblers are working on the first batch of vehicles with local components to export to the African market if the finance ministry gives clear guidelines on local vehicle assembly strategy and policy in 2017 financial budget.

Pix by Lasantha Kumara