Posted by: Ian Rowley on April 22, 2008
India might not be the hot topic for visitors to this week’s Beijing auto show, but Japan’s carmakers—out in number in the Chinese capital—aren’t ignoring Asia’s other billion plus population market. Two weeks ago Toyota, which lags rivals in India, announced plans to build a second plant on the outskirts of Bangalore. Earlier this year Nissan-Renault confirmed they are building a large new plant in Chennai even if a local partner pulled out. And Honda doubled its India capacity last year and is opening a new plant in 2009. Yet, it’s India market leader Suzuki, an also ran just about everywhere else, which continues to impress with the scale of its investment.
According to Monday’s edition of Nikkei Veritas, a new Japan’s business magazine, Suzuki is planning to spend a total of 400 billion yen (about $3.9 billion) in India to fend off rivals. Half will go on factories and production, which will help Suzuki, which already controls about 50% of the Indian car market, raise its Indian production to 1 million cars possibly by October this year—18 months earlier than previously envisaged. The other half will go on improving marketing, logistics and local R&D. Notably, Suzuki will double the number of local dealerships to 1,000 by 2010—more than it has in Japan. The latter, in particular, should help Suzuki to attract new customers outside big cities.