May 07 2013

Suzuki is planning to shift its all small car production to India from Japan. Earthquakes and other natural disaster and calamities are some of the biggest reasons of moving Suzuki small car production to India. Another reason of making India the Suzuki’s small cars hub is appreciating Yen that dented the Japanese firm’s profitability.

Suzuki also owns the 54.2% of the shares of India’s biggest small car maker Maruti Suzuki India Limited (MSIL). The transfer of the production of small cars depends on the Gujrat Plant completion.

Mr, R.C. Bhargava told Financial Express that due to appreciating Yen, small and large car exportation from Japan has become uncompetitive and that is why Suzuki is shifting small car production to India.
Japanese plant of Suzuki will be catering only to the domestic market and the exportation of the small vehicles will take place from India.

MSIL has the wide spread vendor base and also it is very well equipped to cope with capacity expansion that is why Suzuki is shifting the production to India. Gujrat also is a coastal state that is why the export of cars to Africa, Middle East and Europe will happen from the Mundra Port.

Maruti Suzuki India Limited is to invest Rs, 8,000 crores in the Gujrat plant. This investment will be made in phases. The annual capacity of Gujrat plan will be around 1.5 million units. Along with two other plants of Manesar and Gurgaon the total annual capacity will go over 3.2 million vehicles. The MSIL also acquired the 1,100 acres land in Gujrat in two different areas which are almost 18 to 20 km far from each other. Suzuki’s transfer of small car production can push MSIL close to the sales of Hyundai which is the biggest car exporter in India.