Mahindra & Mahindra (M&M) on Saturday opened its first completely knocked-down automotive assembly plant here in a joint venture with Ideal Motors of Sri Lanka.

M&M claims it is the first major passenger car assembly unit in Sri Lanka with local sourcing.

Mahindra Ideal Lanka Pvt Ltd, the assembly plant located in Welipenna near Colombo, on Saturday also rolled out its first product, the KUV100 petrol K6+ variant. This will be followed by other variants in the near future.

Local assembly and manufacturing operations will help Mahindra Ideal Lanka save significantly on taxes.

The KUV100 has been priced at around 3.2 million Sri Lankan rupees (Rs 12.85 lakh).

The assembly unit will help avoid high import duties in the island nation on completely built units, estimated to range from 100 per cent to 300 per cent, based on the engine size or cubic capacity.

At an investment of 200 crore Sri Lankan rupees (around Rs 80 crore), the plant will have a production capacity of 5,000 units per annum.

At the inauguration ceremony, Sri Lankan Prime Minister Ranil Wickremesinghe said he planned to make the country’s manufacturing export-oriented.

M&M managing director Pawan Goenka said, “An investment of 2 billion Sri Lankan rupees is just the beginning. Direct and indirect employment of 200 people is just the beginning. I believe with the policy support from the government, we can do a lot more.”