Suzuki’s small car hub now to be in India
Taking a cue from its global peers, Suzuki Motor Corporation (SMC) plans to shift the production base for its small cars to India. The shift would take place gradually once its subsidiary Maruti Suzuki India’s new factory comes up in Gujarat, with India becoming the export hub for its entire range of small cars. SMC’s main production base, in Hamamatsu, Japan, will then cater exclusively to the home market. In 2011-12, roughly 24% of SMC’s total output of 1 million cars was exported.
Confirming the development, Maruti Suzuki India chairman RC Bhargava said, “Small and large car exports from Japan have already become uncompetitive because of the appreciating yen so Suzuki is instead shifting small car production to India.” Bhargava added it was in this context that it was not seeking a relaxation in import duties in any revised trade agreement with Japan.
Apart from factors like an appreciating yen, which has made exports uncompetitive, and natural disasters in recent times, the shift to India makes sense because SMC is primarily a maker of small cars and has developed a huge component vendor base and supply chain in the country. The labour cost in India would also be less and Gujarat is ideal for exports, being a coastal state.
“Gujarat is ideally suited for exports and this was why we chose to locate the new facility there. We have already bought two tracts of land – 640 and 470 acres – for about Rs 450 crore and they are about 18-20 km
