The Volkswagen Plant Saga: A ghost in the making

The Volkswagen Plant Saga: A ghost in the making

The Volkswagen Plant Saga: A ghost in the making

Written by Tharushan Fernando

06 Jan, 2017 | 8:59 pm

The Motor Vehicle Importers Association says that the vehicle assembly plant being constructed in Kuliyapitiya could be another project that would result in a loss of revenue for the country.

They charge that assembling vehicles and releasing it to the Sri Lankan market will not generate an income to the country.

Volkswagen confirmed to News1st yesterday that that it does not have any investments in Sri Lanka under its brand.

Today two more questions were directed at Volkswagen.

Were there discussions prior to September 2015, on a possible VW venture in Sri Lanka?

Was there an official communication from the Sri Lankan Government which denied VW of the opportunity to invest in Sri Lanka?

Responding to our email Volkswagen Passenger Cars Corporate Communications, Katrin Homman reiterated that ‘there are no decisions for Volkswagen brand investments in Sri Lanka’.

Volkswagen AG has confirmed to Times online that it has not licensed any Sri Lankan company to assemble cars locally. Times online also reports the German Embassy as saying “There is no involvement of German car-maker Volkswagen AG in the project to set up an assembly plant at Kuliyapitiya”

Katrin Homman of Volkswagen Passengers Cars, Corporate Communications had stated that there are no decisions for Volkswagen brand investments in Sri Lanka and, therefore, no agreements with local companies for a production facility.

On  January 5, 2017 Prime Minister,Ranil Wickremesinghe charged that attempts are being made to hinder when starting companies that provide job opportunities.

ranil“We saw one such attempt with regard to Hambantota. There are attempts to sabotage this. These are good mechanisms to provide jobs for the youth”, he said

He charged that News1st is saying that there is no investment by Volkswagen and that it is a company called Western Automobiles Assembly.

“You do not have to go there. If they asked me I would have told them that there was no such investment”, said the Premier.

He further added that in 2015 it was said that an investment from Volkswagen should be brought down and during the end of 2015 and the beginning of 2016, when Volkswagen was in turmoil and when it was being investigated, the government said the investment should be rejected.

Contrary to the statement made by the Prime Minister toda, members of the current government earlier said that there will be an investment by Volkswagen AG in the country.

On October 12, 2016, Minister Akila Viraj Kariyawasam pointed out that this plot of land came the purview of the public trustee department and there is a plot of land on the otherside of about 50 acres allocated to begin the Volkswagen plant.

akila“We hope to lay the foundation stone for it in December. There is a slight delay. We saw certain things being circulated on Facebook. Even though there is a delay we will lay the foundation for it in December”, he said.

He further added that the land has been acquired and everything was done but there were a few matters that needed to be carried out.

State Minister Sujeewa Senasinghe said that the Volkswagen would be brought in the future and until that time steps have been taken to commence a factory that can manufacture vehicles in the country, together with several European manufacturing companies. And this has been done under the basis that 20,000 job opportunities will be provided.

According to the agreement reached with Senok Automobiles and the BOI, vehicles will be manufactured and released to the Sri Lankan market for a period of three years.

As per the agreement, 500 cars will be manufactured during the first year, 750 during the second and 1000 vehicles during the third year. During the fourth year, they will receive the approval to manufacture 1500 cars and 75 percent of it will be exported.

Even though it is stated that a number of job opportunities will be created by these projects, the agreement between the BOI and Senok Automobiles does not detail any commitment to provide jobs.

Convenor for Voice Against Corruption,Wasantha Samarasinghe charged that the the Prime Minister has lied to the whole country and the whole world and he has deceived the people of the country.

He added that it is clear, through the statements made by Volkswagen, that there is no such investment in the country and he should apologise to the nation for the corruption that he has engaged in – and if not he should go home.

“They said they will provide 3500 jobs. Where will they provide it from?” questioned Samarasinghe

State Minister Sujeewa Senasinghe called on the Mahanayake of the Malwathu Chapter of Siam Sect today.

sujeewaViews regarding Volkswagen were exchanged at this meeting where the Mahanyake questioned that it was said that a Volkswagen Plant will be opened but now it seems that this is not the case.

In reply, State Minister of International Trade Sujeewa Senasinghe pointed out that Volkswagen was introduced to the country by the German Embassy and Volkswagen was facing a legal issue with regard to emissions from their cars.

“The issue was from Europe. We wont have any effect for decades, but it is not the same in Europe”.he said

He further added that Volkswagen was compelled to pay a compensation of 800 billion dollars in Europe and they said that they have a financial issue even before coming here. So, it was decided to bring together several other European car-makers and establish an assembly plant in the country

Meanwhile, a South Korean court today sentenced an executive of Volkswagen’s local unit to one year and six months in prison for fabricating documents on emissions and noise-level tests to achieve certification for vehicles for import.

volksThis is the latest fallout from Volkswagen’s emissions-test cheating scandal that last year resulted in a sales suspension in South Korea, a once fast-growing market for the German automaker.

In August, South Korea’s environment ministry suspended the sales of 80 models of Volkswagen, Audi and Bentley vehicles, and fined the group’s local unit $14.91 million for allegedly forging documents on emissions or noise-level tests.

Meanwhile. US media reports that a US court has issued a ruling which states that Volkswagen AG, former Chief Executive Martin Winterkorn and other top executives must face a lawsuit filed in the U.S. by investors seeking damages, after the German auto maker’s share price dropped in the aftermath of its emissions-cheating scandal.

During the end of last year Volkswagen announced plans to cut 30,000 jobs worldwide with about 23,000 of the losses borne in Germany.

Volkswagen expects the job cuts to bring annual savings of $3.92bn by 2020.

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