Suzuki plans third auto plant in India
New manufacturing facility in India expected to be up and running by 2013
Tokyo: Suzuki Motor Corporation is planning a third vehicle plant in India to keep up with burgeoning sales, the Japanese small-car maker said on Monday.
The plant will be up and running, perhaps as early as 2013, at the same site as its plant in the northern town of Manesar, Haryana, with a yearly production capacity of 250,000 vehicles, a company official said.
Suzuki holds a controlling 54 per cent stake in Maruti Suzuki Ltd, India's largest car maker.
Long India's dominant car maker, Maruti Suzuki is losing market share as it faces capacity constraints and new competition from companies like Ford and Tata Motors, who have successfully launched models in Maruti Suzuki's core small car segment.
In August, Maruti Suzuki sold 104,791 vehicles, its highest ever monthly sales, up 24 per cent from last August. But its share of India's car market slid to 47.7 per cent in the April to July period of this year from 53.3 per cent the year before, according to the latest data available from the Society of Indian Automobile Manufacturers.
With the addition of the third plant, and another assembly line that will be up and running by 2012, the production capacity at Manesar for Suzuki Maruti will rise to 800,000 vehicles a year.
The current Manesar plant made 360,000 vehicles last year, such as the Swift compact and SX4 sedan, running on extra shifts, to outpace its production capacity of 300,000, according to Suzuki. Model plans for the new plant have not been announced.
The Society of Indian Automobile Manufacturers, an industry body that represents over 40 vehicle manufacturers in India, estimates that car sales for the fiscal year that began April 1 are likely to touch 1.7 million vehicles, a growth of more than 12 per cent from the previous fiscal year.
Suzuki is banking on growth in India at a time when demand in Japan is stagnating.
Suzuki recently cancelled an investment in a project that would have brought together auto-parts suppliers in central Japan.
Suzuki chairman Osamu Suzuki has also been vocal about the battering from the surging yen, which erodes the value of exporters' overseas earnings.
Japanese automakers have been moving production abroad to skirt the risks from currency fluctuations. Suzuki autos sold in India are now almost all manufactured in India.
