Suzuki to spend further $1.6 bln in India by 2010 http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-02-06T200506Z_01_NOOTR_RTRJONC_0_India-286556-3.xml
Tue Feb 6, 2007
By Rina Chandran
MANESAR, India (Reuters) - Japanese compact car maker Suzuki Motor Corp. will invest a further 200 billion yen ($1.66 billion) in its Indian venture as it expands capacity at car and engine plants, its chairman said on Tuesday.
Already, 100 billion yen has been invested in the plants run by Maruti Udyog Ltd., and another 200 billion yen will be spent by 2010, taking total capacity to 1 million cars a year from 630,000 now, Osamu Suzuki said. Maruti, which is majority-owned by Suzuki, on Tuesday opened its fourth car plant -- in Haryana, near New Delhi -- which will have an initial annual capacity of 100,000 units.
That will be expanded to 300,000 units by 2010.
"Suzuki made a commitment to India at a time when it was not fashionable to invest in India," Maruti Udyog Managing Director Jagdish Khattar told reporters.
"This (new plant) marks the most important milestone in our partnership." Maruti had earlier said total investment in new plants and new cars would top 90 billion rupees ($2.04 billion) by 2010.
Maruti will make its popular Swift hatchback at the new plant, which can roll out a car every 50 seconds.
A new export model, scheduled to be launched in 2008/09, will also be made at the plant, located in a 600-acre campus that will also house vendors and a research and development facility.
A diesel engine and transmission plant, which was also inaugurated on Tuesday at the same location, will start with an output of 100,000 units and reach 300,000 over the same period.
"We have entered the diesel segment with a very competitively-priced product," Khattar said.
"We think it will help us a great deal."
Maruti, which has nearly half of India's market of mostly small cars, is offering two variants of the Swift with a 1.3-litre Fiat multijet engine. J.D. Power estimates diesel's share of India's passenger vehicle market will grow to 35 percent by 2010 from 30 percent.
Shares in Maruti ended down 1.2 percent on Tuesday at 952.30 rupees in a slightly weak market.
Maruti, which will also upgrade its existing plants in Haryana's Gurgaon town, plans to export 200,000 cars by 2010 to Europe and other markets. It also hopes to export diesel engines to Suzuki units worldwide, starting with Hungary.
Maruti will also make a new model for European markets from 2009/09, and 50,000 compact cars a year for Nissan.
In addition, Suzuki plans to invest about 20 billion yen in expanding capacity in a majority-owned motorcycle plant in Gurgaon. It has an annual capacity of 100,000 units now.
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