The ground breaking on the much publicized and long overdue Volkswagen assembly plant will break ground in Kuliyapitiya today under the patronage of the Prime Minister Ranil Wickremesinghe.
Volkswagen AG’s local joint venture partner is Senok Automobiles and the total investment will be US$ 26.5 million. Out of this US$ 21.5 million will be invested in fixed assets within a period of 24 months, the Board of Investment said.
The company will initially assemble vehicles in the 1000cc to 2000cc category and these vehicles will be diesel powered and include passenger cars, Sport Utility Vehicles (SUV), Multi Utility Vehicles (MUV) or commercial vehicles.
The agreement to assemble cars was signed by BoI Chairman Upul Jayasuriya and Senok Automombiles Chairman Noel Selvanayagam in April 2015.
The uniqueness of the project in addition to bringing investor confidence for Sri Lanka and FDI’s it will also bring in advanced German automobile technology into the country and create job opportunities for the local youth.”
Volkswagen, the second largest car maker in the world had strived since 2008 to start up a business to manufacture cars in Sri Lanka for export,but did not succeed for various reasons.
Prime Minister Wickremesinghe also earlier noted that as part of new administration’s ambitious plan of creating a social market economy, it is ready to discuss such projects which will give high paying jobs to workers and raise household income levels.
Volkswagen which rose from the ashes of World War II was one of the firms that contributed to the so-called German economic miracle of the country’s social market economy.The company revenue was Euro 197 billion in 2013 and is best known for iconic models such as Beetle, Golf and Passat.
Volkswagen also announced that is to start producing cars in Kenya and Rwanda and start a ride-hailing service in Kigali, as the German carmaker expands pay-per-use transportation business models in markets where rival Uber has not gained traction.