Suzuki to invest $3 billion in India over 3 years

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Suzuki Motor Corp has aligned an investment of approximately $ 3,000 million (Rs 20,000 crore) in the Indian market over the next three years, as it aims to maintain its dominance of the Indian passenger vehicle market and prepare for the next big jump in electricity and hybrid vehicle technology.

Of the $ 3 billion, almost $ 2.3 billion will be pumped by the Maruti SuzukiBSE 1.20% listed unit and the rest by the Suzuki Motor Gujarat manufacturing arm for capacity expansion.

Maruti Suzuki has exceeded 50% of the market brand in the current fiscal year.

Given the changing regulations and demand for electrification, Maruti Suzuki will probably spend around Rs 5 billion per year over the next three years, compared to the Rs 3,500-4,000 it has spent annually in recent years. The annual spending plan of Rs 5,000 crore will cover the investment in products, research and development, the expansion of the dealer network and the improvement of efficiency.

The market is working well and Maruti Suzuki will continue to grow, investing in new capabilities and products to stay ahead, said managing director Kenichi Ayukawa to ET.

“Competition is always difficult, whether your participation is 40% or 50%,” he said.

“Everyone is trying to capture (share) additionally and the only way to increase their participation is by giving the right products to the customer.

In addition to launching conventional products, we are also working on electric and hybrid vehicles, which requires more investment, “said Ayukawa.The government is working hard to ensure that all vehicles sold in the country by 2030 are powered by electricity. I have been looking to create an ecosystem that supports this, seeking to cleanse the highly polluted air in the cities of India.

In addition to launching two or three new products each year, Maruti Suzuki has already announced plans to develop an electric vehicle by 2020. It will also work in hybrid units, which will play a key role in its larger vehicles, such as S-Cross and the Ciaz in the future. Maruti Suzuki has already forecast double-digit growth in the next fiscal year, after a similar rate of expansion in fiscal year 18. Investment has also advanced in a second plant in its Gujarat site and discussions are under way in a third.

The company is likely to end fiscal year 18 with volumes above 1.75 million units, which is likely to reach its FY20 target of 2 million a year sooner than expected. The new Swift and the new generation of Ertiga twins (YHA and YHB) will become their big product launches for the year, helping Maruti Suzuki maintain its position. Both will be announced at the Auto Expo in progress.

The company is also likely to launch its own 1.5-liter diesel engine during the year. This is expected to feed the Ertiga.