grow in various markets like Colombia and Laos” where the company does not have a large presence yet, the person cited earlier said. “The company is also looking to enter South Africa in a big way — it is 40% of the African car market,” the source added.
Manish Sabharwal, CEO at staffing firm TeamLease, said that the wage bill for a blue-collar worker in Japan is about five to eight times higher than in India, without taking into account additional payroll costs like social security. “The problem in Japan is not only high cost of labour, but their population is also declining. Who knows, in the long run cars may be exported to Japan from India as well. The car business is very labour intensive,” he said.
A sector expert with a global consultancy firm said, “The strategy to shift export production to India will do well for Suzuki. This is what all multinationals like Bosch and Daimler are doing as a long-term strategy. It gets you to utilise capacity, while quality gets pushed up.”
Maruti exports to about 120 countries, a large part of which is CKD exports of models like the Swift and Ertiga. Among other models, Maruti already makes LHD versions of the Dzire and A-Star, though it now expects the Swift to deliver far higher export volumes. Originally launched in 2000 and now in its third generation, the Swift has been one of Suzuki’s most successful brands globally.
Separately, Maruti is also working on feasibility studies in order to set up assembly plants in various emerging markets such as Sri Lanka and South Africa, and a decision on this is expected by end of this fiscal. The move will help the company avoid trade barriers like high import duties. The focus on emerging markets by Maruti follows a recent change in mandate by parent Suzuki under which Maruti has been entrusted to develop and market products in emerging markets globally, while Suzuki will focus on developed markets like Europe and Japan.
The Maruti Suzuki share on the BSE closed up 1.61% at Rs 1,397.95 on Wednesday.