Sri Lanka’s first company dedicated to manufacturing and assembling cars domestically, Micro Cars – a concept designed and realised by veteran automobile engineer Lawrence Perera – came to life with its first car ‘Micro Privilege’ in 2002.
Making its mark with the first car model to be designed and built in Sri Lanka, the company initially struggled to keep up with the demand that was the inevitable result of the car’s positive reception. Constrained by the size of its production capabilities, Micro nevertheless persevered through the challenge, and began exporting its vehicles to Nepal and Bangladesh in 2011.
Growth over the past 20 years has also come through diversification, and Micro Holdings presently incorporates a group of subsidiaries, including Transmec International, the after-sales arm of Micro Cars; Euro Sports Auto Lanka, a luxury automobile brand franchisee; and Micro Construction, a civil engineering firm that recently established a presence in the luxury condominium developer market.
This diversification has allowed the company to establish a presence in industries that it recognises will play an important role in a quickly developing country like Sri Lanka – and which will enable it to reap the rewards of the growth potential on offer in these sectors.
Lawrence established Micro Cars having already amassed extensive experience in the automotive industry, working with well-known, world-renowned brands like Aston Martin, Audi, Chrysler, Mazda, Mitsubishi, Peugeot and VW. Prior to founding the company, Lawrence played an integral role in establishing Colombo’s BMW franchise and obtaining the Sri Lankan franchise rights for Alfa Romeo back in 1992.
In the company’s early days, Lawrence identified a need within Sri Lanka for a compact car that was economical, reliable and durable. Drawing on both his engineering skills and his wide-ranging familiarity with the automotive industry, Lawrence decided to design the car himself, beginning the process in 1999.
“My passion for cars, and curiosity about doing things differently, paved the way for Micro Cars to develop Sri Lanka’s first motor car, with a patent for its unique structural design.” The Micro Privilege model went into production in 2003, Lawrence says, “with a confirmed customer order list of over 2,000 units, with a 60% local value addition of components manufactured within the country. Things were not moving as seamlessly as they could, due to the lacklustre approach of the government at that time. This posed a steep learning curve, but things began to go smoothly with the support of a competent team.”
“My passion for cars, and curiosity about doing things differently, paved the way for Micro Cars to develop Sri Lanka’s first motor car.”
Due to the Privilege’s success, Micro Cars began to garner international recognition, and went into business with global brands like SsangYong Motor Company and Geely Group (the owner of Volvo). Micro assembles SsangYong’s SUVs and double cabs with Mercedes-Benz diesel engine technology, as well as Geely’s compact cars and sedans. It also has a presence in the luxury car segment. “We have been blessed to associate with world-renowned luxury sports car marques, such as Lamborghini and Maserati,” notes Lawrence.
“We are a pioneer in importing these new cars into the country, while showing the world that Sri Lanka is a fast-developing country in all aspects. We have also changed public intercity transportation by introducing luxury coaches and becoming the first company to operate super low-floor city buses in the capital city of Colombo.” Clearly committed to entering new markets, Micro is embracing the global shift towards electric vehicles (EVs), with a project underway to assemble EVs for the Sri Lankan and regional export markets.
The Micro Privilege is no longer in production, but will always remain an important landmark for Micro Cars. Affordable and efficient, the vehicle catered to the need of the common person, representing not only the realisation of Lawrence’s founding vision of a car for all Sri Lankans, but also a successful investment in Sri Lanka’s industrial capabilities. One of the country’s biggest champions, Lawrence nevertheless notes that it is not all smooth sailing, and is adamant that there is significant room for improvement when it comes to government policies for growth, particularly in the automobile engineering industry.
While the larger Micro Holdings is strategically carving out a space for itself in a variety of industries, Lawrence identifies a lack of government oversight in the auto sector as a brake on growth. “Growth in any industry,” he says, “can only be sustained through proper implementation of consistent economic and investor-friendly policies, as well as a development-centric stance on the part of policymakers.” He finds that the biggest impediment to Micro Cars’ growth is a lack of state support for local industry development, and inconstant and volatile policies that make it difficult to plan for the long-term.
“As the world is looking towards more sustainable transportation systems, in Sri Lanka we are yet to develop the infrastructure required even for EVs,” he explains. “Recent government policies have shown bold steps in the right direction, but it remains to be seen if they will deviate from this stance due to pressure from external lobbyists, who only consider short-term profits. Our global partners are keen on investing in new ventures in the country; therefore, investor-friendly policies are vital to take the country forward, and I have no doubt they would be welcomed by the entire business community in Sri Lanka.”
“Our global partners are keen on investing in new ventures and opportunities in the country.”
Despite the obstacles in its path, Micro is committed to remaining competitive both locally and globally, and derives strength from collaboration with its international partners. Lawrence expresses a debt of gratitude to these companies, acknowledging that the technology and expertise they have shared has allowed his company to become a household name. He is understandably proud of what Micro has accomplished in a little over two decades.
“A small company that started in 1995 with 10 employees today provides direct employment opportunities to more than 900 people, and indirect opportunities to well over 1,000, with the latter generated by the support the company extends to local, small-scale businesses.”
It is easy to identify with Lawrence’s desire to have the company he founded become a part of Sri Lankan daily life, both through its products – beginning with the Privilege – and its operations. “As a Sri Lankan company, we have the potential and capabilities to make a meaningful contribution to the country’s economy. The only company assembling vehicles in the country, we have the technology, capacity and know-how to manufacture vehicles to cater to the needs of the local consumers,” he points out. But again, there is a risk that the future, which should be promising, could turn into a nightmare due to unfavourable state policies.
Lawrence is ready with the solution. “Reducing vehicle imports will create more job opportunities for local workers, and it will benefit small-scale businesses like automotive component manufacturers and self-employed individuals. Further indirect employment avenues will open up as a result, and we will see a reduction of substandard vehicles coming into the country – which is turning Sri Lanka into a dumping yard.”
Until recently, Sri Lankan government policies had favoured companies that import used cars, but in 2018 the government began to pay attention to the problems identified by Lawrence that these policies were causing. August saw a sharp increase in taxes on small cars, designed to slow down the rate of imports into the country, after it became apparent that car imports were to blame for the US$700 million year-on-year increase in the trade deficit that took it to US$4.9 billion for the first five months of 2018.
While steps are being taken in the right direction, the auto industry isn’t quite out of the woods yet: Sri Lankan Prime Minister Ranil Wickremesinghe has expressed hope that the tax increase will be only a temporary measure, designed to quickly improve the trade balance.
In the face of this uncertainty, Micro derives strength from the enduring solidity of its international partnerships, as well as the continuing contribution of its employees. The relationships Micro has developed with its partners in countries throughout Europe and Asia are built around respect. “I have a good relationship with partners in France, Italy, China, Malaysia, India, Korea and Germany,” Lawrence says. “They respect me and they respect Micro Cars and, similarly, I respect them.”
He shares an example that reveals the dividends paid by early investment in these kinds of relationships. With the automotive industry becoming increasingly interested in renewable energy, Micro Cars has made sure to position itself such that it can take advantage of the opportunities attendant upon the introduction of new technologies.
“Micro Cars has been quick to embrace this change, and to partner with world giants like the German firm Magnum Pirex, to develop a compact, low-cost electric
car for Sri Lanka and for regional markets.” The importance of stable partnerships comes to the fore here.
“When I told Magnum Pirex that we had an opportunity,” Lawrence continues, “they came running to Sri Lanka – not alone, but with many big companies. Why? Because I kept going with them. They are a prime supplier, and by keeping lines of communication open, we were able to encourage them to bring an opportunity to a small country like Sri Lanka.”
In another instance of sound partnership, Micro Holdings entered into an agreement with the South Korean conglomerate SK Group, one of the world’s largest EV battery producers, in April 2017. The agreement is designed to enable Micro to transform Sri Lanka’s transport industry, and the Group plans to support Micro to increase its production capabilities through an injection of funds, as well as the introduction of new technology to Micro’s operations.
The partnership has been shaped in response to a growing demand for EVs, but also acknowledges Micro Cars’ ability to compete on the global stage. Plans are in place for Micro to manufacture EVs in Sri Lanka, eventually offering exports to the South Asian region and beyond.
In broader terms, Lawrence notes that an important benefit stemming from Micro’s healthy partnerships is increased buying power. “We can negotiate with our partners because they trust us and have faith in us,” he says. “Once you have built up that kind of working relationship, there is a lot to gain, including knowledge of market-based pricing strategies. This allows us to get closer to what we want.”
“We can negotiate with our partners because they trust us and have faith in us.”
The company’s staff is another of its weapons, and relationships between management and staff, too, are built on respect. Because of its sustained success and its Sri Lankan roots, Micro has managed to create strong brand loyalty; in addition, “the diversity offered by the company entering different segments of industry is indeed attractive to jobseekers. We provide our employees with opportunities to exercise their creativity and independence, and we
have developed a working environment conducive to the rational thinking of our young workers,” says Lawrence.
“Exposure to world-class international brands in both automobiles and civil engineering has helped to groom young, dynamic executives who have reached
great heights in their professional careers even after leaving the company.”
The company’s culture is dedicated to its employees fostering an attitude that disregards a fear of failure – an attitude particularly desirable in an industry driven by innovation. “We encourage employees to explore every opportunity, irrespective of the ultimate result; whether it be a success or failure. We believe you will never know if you never try.” A strong team mentality drives innovation, says Lawrence, recognising that the team members’ enthusiasm and dynamism are reinforced through employee recognition, taking shape as “appreciation, reward and applause”.
“We value our human capital, knowing it is the greatest asset we possess.” Certain processes in Micro’s factories, as well as some of its machinery, have been designed by Micro employees, whose ideas are taken seriously, giving them an additional level of investment in what they are doing.”
“We value our human capital, knowing it is the greatest asset that we possess.”
While celebrating the entrepreneurial spirit, Lawrence cautions that people shouldn’t stray too far from what they know. “Do what you want,” he says. “But don’t get into a business that you don’t know. Many people make big mistakes by trying to copy others. You need to think of your own inventions, and put your
heart into them.”
As a leader, Lawrence defines his main responsibility as being the driver behind realising the company’s vision, and he has cultivated a leadership style that enables him to fulfil this role. “Self-reflection, as well as constructively acting on what it reveals, is the best source of mature growth. I treat every success and failure as a learning opportunity, and strive to reinvent myself every day.
“My tendency to act swiftly when opportunities arise has helped me to become better at what I do, and I welcome any innovation, even though it may not show an immediate return on investment. This has enabled the company to reach untapped territories with new innovations, while taking the Micro brand, as well as Sri Lanka itself, to the international arena.”
Micro Cars has already expanded beyond cars, and it will continue to branch out. The company is currently considering the development of Sri Lanka’s railway system which, by all accounts, has been neglected for too long.
With technological assistance from the German engineering company ZF Friedrichshafen, the company plans to design a light rail solution that targets efficiency improvements with the ultimate objective of improving the commuting experience of the millions of people using public transport in the country. This is another way in which the company seeks to contribute to the improvement of Sri Lankan lives; as Lawrence notes, “A well-oiled public transport network is vital for the development of any country.”
With the roadmap for the upcoming years looking to have taken shape, Lawrence has certainly earned a brief timeout to consider what he has achieved with the company. “Today, Micro has won the trust and recognition of Fortune Global 500 companies, and we are respected in many parts of the world,” he says. While Micro Cars is still Sri Lanka’s only local automobile manufacturer and assembler, Lawrence knows that he is “privileged to have taken Sri Lanka, a small island nation, to the global stage”.