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Suzuki to make Splash in India but no sign of a cheap car

Posted by: Ian Rowley on December 12, 2007

Last week, I wrote a quick piece after Suzuki chairman Osamu Suzuki raised doubts over plans by both Tata and Carlos Ghosn’s Nissan-Renault alliance to make a $3,000 car for sale in the world’s second most populous country. It’s fair to say, Suzuki, the 77-year-old chairman of Suzuki Motor, isn’t a big fan of the idea. “There is a slight lack of clarity about this $3,000 figure. Does it refer to the actual retail price? Or does it refer to the cost of materials that are used in preparing this automobile? It’s not quite clear,” he said, before questioning what level of safety and emissions standards such a cheap car could achieve.

Yet none of that means Suzuki is going to stand by and let rivals eat into Suzuki’s 50% plus market share in India without a fight. Last night, the tireless Mr. Suzuki was in Delhi to announce two new cars which will be produced by the company’s Maruti Suzuki India subsidiary from next year.

One is the Splash diesel, which is already being built at the company’s Hungary plant for sale in Europe. It looks like a nice small car, but what it isn’t is Suzuki’s answer to Tata’s cheap number. In Britain, where cars admittedly often cost a lot more than many other markets, the Splash will go on sale in March with price tag of about $16,000. (For comparison, prices for the Toyota Yaris start from about $18,000). The Indian price isn’t yet known, but it’s safe to say Suzuki is will be looking to wealthier Indian car buyers with the Splash than its cheap car competitors.

The second new model sounds like more of the same. Currently a concept known as the A-Star, it will be another global small car, powered by a 1 liter, aluminum engine and compatible with Euro 5 emissions standards. Suzuki will produce 150,000 a year but export two-thirds of the total to Europe. If Suzuki is planning a truly cheap car for India, they’re keeping it very quiet.

Reader Comments


December 16, 2007 7:49 PM

Suzuki-san has an interesting point, of course. But it will all be ironed out over time.

Why should Suzuki become involved in building a 'cheap car' in India then have to tolerate the world media knocking it for lacking this and that? Better to opt for mid-price, and equip the vehicles well right from the get-go. Hang on to the 50% market share, leave the cheapies to others to struggle with. Design, manufacture, and sales are just the beginning. Warranties can kill the makers as some 'iconic' US manufacturers have learned to their shame and as has been driven home to super-arrogant Mercedes Benz with railroad spikes and sledge hammers over the past 10 years or so. And no, it has not all been the fault of the Turks!!!

What is sorely needed is innovation, and why not introduce this in India with a relatively small car population about to grow like a wildfire? Here in the US we have a vast fleet of super-humongous vehicles making it difficult and rather unsafe to introduce cars and trucks of reasonable size. In the ende, this could launch India into the mainstream of practical/economical vehicle design and production. Down to the fitting ende they dug for themselves would go GM, Ford, and Chrysler. Perhaps in this scenario even 'mighty' Americans might finally awaken to the fact that there is a WORLD out there beyond our borders.

Vivek Thontadarya

December 17, 2007 6:21 AM

As the strategy guru CK Prahlad says there is fortune at the bottom of the pyramid. Tatas want to address this segment which is currently not served. An all weather proof family vehicle which fits the purse of two wheeler owners of third world countries, who can't even afford the cheapest cars available in the current market.

Should Suzuki be worried? Well if Suzuki is not concerned about this segment then just be happy with the market it is currently addressing. It will continue to enjoy the market share in the segment it is currently operating. Why worry about overall share? Because it is all together a diffent market segment which is addressed by any one.

About safety and emmission? Well, the proposed TATA car will be safer than the scooters to carry a family and cleaner than Auto Rikshaw which operates in third world country.

It is not uncommon to see a family of 2 adults and a child travelling in a two wheeler in third world countries. This market can't be ignored and I'm sure who ever serves this market will be market winner.

rajkiran khandelwal

January 1, 2009 1:40 AM




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