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Automobile Component Manufacturing Industry To Link To The Global Value Chain

Business News Update: The global trading environment is evolving rapidly with numerous developments in global production networks and global value chains. These developments are a result of product fragmentation; cross boarder dispersion of components and production/assembly. Each country specializes in a particular stage of production sequence and trades the value added components which ultimately results in the final product.

Sri Lanka needs to switch to export-oriented industrialization where the economies of scale could be reaped and more foreign exchange earned. Given the small market size of Sri Lanka, import- substitution industrialization cannot reap the economies of scale in the domestic market and save foreign exchange to match the foreign exchange earnings of export-oriented industrialization.

The automobile component manufacturing industry has been identified as one such sector to be developed and promoted in the international market by linking with the Global Value Chains (GVCs). At present, many companies in Sri Lanka are engaged in manufacturing automobile components but mainly produced for the local after sales market. Sri Lanka produces polymer and metal base automobile components such as wire harness products, rubber carpets, beading, mud flaps, washers, bushes, gaskets, leaf spring, center bolts, bronze bushes, coil spring, bearings etc.

The EDB has implemented a number of product and market development programmes for this sector. The product development programme implemented in 2018 by obtaining the services of a qualified technical expert from a Senior Expert Service in Germany was one such programme. During the programme, the expert highlighted that there is a vital need to upgrade the knowledge and exposure of the component manufacturers on the areas of quality, standards and required certification to enhance the capabilities of the automobile component manufacturing companies to connect to the global value chain.

Keeping in line with the above requirement, the EDB, with the assistance of Sri Lanka Consulate General in Mumbai, India, organized a tailor-made Technical Training & Exposure programme on Advanced Material & Characterization and Testing & Certification at Automotive Research Association of India (ARAI) from 14th to 19th October, 2019, with the objective of providing first-hand knowledge and exposure on industry requirements, international standards, new technological improvements etc. The ARAI is an autonomous body affiliated to the Ministry of Heavy Industries and Public Enterprises, Government of India.

Clinco Rubber Mouldings (Pvt) Ltd, M. V. Electronic (Pvt) Ltd, Bopitiya Auto Enterprises, De Saa Holdings, Lancor Rubber Industries, New Priyadarshani Brassware, Saniklo Metals and Udaya Industries Pvt Ltd participated in the programme. The training programme was conducted for 5 days by the ARAI and included lectures, visits to testing laboratories, and factories manufacturing automobile/ automobile components. Delegates had the opportunity to visit well established manufacturing facilities such as TATA Motors, Skoda Auto Volkswagen India (Pvt) Ltd and Mahindra & Mahindra Limited, Pune. The participants were able to establish contacts with the ARAI’s testing facilities to develop their product samples and the EDB is planning to assist participant companies to develop in-house testing facilities to standardize their products to enter into the global value chain.

The EDB organized a half-day knowledge sharing workshop on 28th January, 2020, at the EDB auditorium to disseminate the knowledge gained from the Technical Training & Exposure programme held in Pune, India to the industry at large. Ms. Manisha Rodrigo, CEO of Bopitiya Auto Enterprises was the main presenter who shared her knowledge gain through Pune programme. In addition Dr. Malika Perera, Senior Lecturer, Dept. of Mechanical Engineering, Faculty of Engineering of Sri Lanka Institute of Information Technology (SLIIT) made a presentation on new technology improvements of the automobile industry and on the testing facilities available for automobile components at SLIIT.

Jeevani Siriwardena, Director General – EDB, made the opening remarks of the workshop. Mr. Dimantha Jayawardhana, President of Sri Lanka Automobile Component Manufacturing Association (SLACMA) also addressed the participants, highlighting the importance of automobile components manufactures attending this kind of programmes to upgrade their knowledge and identify the opportunities in international markets. Forty (40) participants from the automobile component manufacturing industry joined the programme.

The participants were able to gain knowledge on material selection for various applications, requirements and testing methods available for automobile/ automobile components, and effectiveness and efficiency of automobile component manufacturing plants in India.