The Board of Investment of Sri Lanka (BOI) today signed an agreement with Senok Automobile (Pvt) Ltd and Volkswagen AG to set up an assembly plant for Volkswagen Automobiles in Kuliyapitiya. BOI Chairman, Upul Jayasuriya who signed the agreement with President of Senok Group of Companies, Noel Selvanayagam said the investor is however yet to finalize the exact location of the land.
“The land needed for the plant is a total of 30 acres. We have earmarked three choices for them and the investor will choose from one of these locations shortly,” Jayasuriya said.
Noting that the proposed assembly plant will bring in an estimated Foreign Direct Investment (FDI) inflow of US$ 21.5 million and an additional inflow of US$ 5 million as indirect investments, Jayasuriya disclosed that Volkswagen AG had been granted an eight-year tax holiday for the project.
“Under this agreement, which falls under the BOI Section 17 agreement, the investor will assemble vehicles in the 1,000cc to 2000cc category. These vehicles will be diesel powered and include passenger cars, Sport Utility Vehicles (SUV), Multi Utility Vehicles (MUV) or commercial vehicles,” a statement from the BOI said.
The statement noted that initially these vehicles would be marketed locally for a period of three years and thereafter the vehicles manufactured will be exported to overseas markets. The BOI said it is estimated the assembly plant will be operational within a period of 30 months.
“There is also 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 statement by BOI noted.
Senok Automobiles Pvt. Ltd. is the sole agent in Sri Lanka for Volkswagen. Among the under 2000cc category of passenger cars marketed by Senok in Sri Lanka are Polo, Golf, Jetta, Beetle, Passat and Tiguan.
The Volkswagen Group with its headquarters in Wolfsburg, Germany is one of the world’s leading automobile manufacturers and is the largest car maker in Europe.
VW covers the entire stratum from passenger to Commercial Vehicles with the following brands under its umbrella Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Scania and MAN.