Suzuki will start to manufacture small cars in India, through one of its partners, and sell them on the home market.
The information was published by the Indian press and confirmed by the chairman of Maruti Suzuki India Ltd., a manufacturing partner of the Japanese automaker on the Indian market.
The two companies have started a joint-venture in India, 70 percent owned by Suzuki, in order to step up research and development. Ultimately, the whole engineering process of Suzuki will be moved to India, a Maruti Suzuki official said, on condition of anonymity. There is no time frame set so far, he added.
Analysts think Suzuki is transforming Maruti into a production hub in order to adjust to the increasing worldwide demand for small cars which consume less fuel and respect new stricter emission standards. The strengthening of the yen against the U.S. dollar may be another reason for which Suzuki is looking at moving production to India.
Suzuki, of which 20 percent is owned by Volkswagen AG, reported a 20 percent decrease of the operating profit in the April-June quarter, following the natural disasters that disrupted supply chains in March.
The Japanese yen strengthened 11 percent against the dollar in the quarter, hurting the profits of the exporters.
Photo by Saptarshi Biswas