Japan's Suzuki Motor said Tuesday it will roll out its next new car from India, targeting European buyers, as it invests 1.8 billion dollars in making the nation a global production hub.
Suzuki Motor Corp, an early entrant into the Indian market when the billion-plus nation began opening up its economy in the 1990s, is ramping up output with its Indian unit Maruti, maker of half of all new cars in India. "Our next world car will be made in India," Suzuki chairman Osamu Suzuki told reporters in the Indian capital.
"Given the importance of India to the Suzuki world strategy it is planned to invest 200 billion yen (1.78 billion dollars) for plants in India to 2009," he added. Tuesday's announcement underscored the importance of the fast-growing Indian car market to Suzuki after its Indian unit outstripped its parent in sales in their home markets in the first half of the year for the first time ever.
The Indian market has been spurred by a booming economy, growing at an annual nine percent, that has created new affluent breed of car buyers. Global automakers have been steering towards India in a bid to make inroads into one of the world's most rapidly expanding vehicle markets.
The new A-segment one-litre engine, five-door hatchback will be called the "A-Star." It will be the fifth global car from the Suzuki line-up after the Swift, the Grand Vitara, the SX4 and the Splash. There were no pricing details. Suzuki Motor aims to get about 70 percent of its global revenue from outside Japan this year. Europe now represents some 15 percent of global vehicle sales.
The plans to export cars from India mark a strategy shift by Suzuki which has not until now used the South Asian country as an export base. Production of the new car will begin in October 2008 at the company's plant in Manesar on the New Delhi outskirts. Some 50,000 of the new cars will be earmarked annually for Indian buyers and 100,000 for Europe, the company said. The environmentally friendly car would boast lower C02 emissions than its European rivals, the company said.
Maruti Suzuki India, owned 54.2 percent by Suzuki, will unveil a "concept version" of the new car at the Auto Expo next January in New Delhi. The 1.78 dollar billion investment to be spent on manufacturing facilities includes the capital expenditure for production of the new car. It comes on top of plans announced in October to spend 1.75 billion dollars on research and development.
Maruti Sukuki, the leader in the main small car market, must fend off competition from Indian rival Tata Motors which aims to launch a 2,500 dollar car next year as well as another low-cost car planned by France's Renault. Suzuki plans to boost Maruti Suzuki's production capacity to 960,000 cars by 2010 to meet burgeoning Indian demand in the fiercely competitive market.
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