Suzuki’s small car hub now to be in India
apart. The final clearance on the first phase of Rs 4,000 crore investment is expected from the board in January, after which construction will start,” a company official said.
SMC, which owns 54.2% in Maruti Suzuki India, is emulating South Korean carmaker Hyundai and Japan’s Nissan, both of which have made India their global production hub. Other Japanese players such as Honda and Toyota too have made India a hub for some of their models.
SMC’s 2012 annual report carries a message from the management saying the yen appreciation and sales drop in India had resulted in net sales for the overseas operations in the fiscal ended March 31 falling 8.7% to 1,525.4 billion yen.
During 2011-12, SMC’s net profit stood at 53.9 billion yen (Rs 3,641 crore), 25% of which was contributed by Maruti Suzuki.
Maruti plans to invest about Rs 8,000 crore in Gujarat for building a 1,110-acre production facility. At full capacity, this facility is expected to churn out 1.5 million cars a year, taking Maruti’s total annual output to over 3.2 million units with the Gurgaon and Manesar facilities in Haryana combined.
Analysts said that the move makes sense but Maruti would have to ensure that labour relations are cordial. The company witnessed major labour trouble at its plant in Manesar this year, which crippled production of some its best-selling models.
VG Ramakrishnan, managing director, South Asia, at consultancy Frost & Sullivan, said that making India an export base will give Suzuki the flexibility to push more products at home,
