Suzuki Motor to invest US$8bil in India, starts EV production

NEW DELHI: Suzuki Motor Corp. plans to invest over 700 billion rupees (US$8 billion or RM33.9bil) in India, Chief Executive Officer Toshihiro Suzuki said, underscoring the country's growing importance for the Japanese automaker as it forays into electric vehicles production.

This investment will happen over a period of five to six years, Suzuki said in a speech Tuesday, without elaborating.

He was speaking at an event in the Hansalpur plant in the western state of Gujarat from where the company will be making its first e VITARA SUVs.

This facility "will shortly become one of the world's largest automobile manufacturing hubs, with a planned capacity of 1 million units," Suzuki said, adding that the e VITARAs manufactured here will be exported to more than 100 countries, including Japan and Europe.

The first shipment of these EVs is headed for Europe, its local unit, Maruti Suzuki India Ltd., said in a statement.

The parent's investment will help Maruti Suzuki which aims to double production capacity in India to 4 million units by the end of this decade.

Suzuki Motor is looking to break into EVs as well as ring-fence its market dominance in India with these planned investments as it faces shrinking demand in Europe and its home market, Japan.

The South Asian nation is the company's largest market by revenue and is now also evolving as a key export hub for its EV business.

Suzuki Motor, with partners Toshiba Corp. and Denso Corp., has also started making lithium-ion batteries locally as it seeks to secure supply chains for its hybrid vehicles amid rising trade barriers.

The automaker will lean on multiple technologies to cut emissions, including electric-powered motors, strong hybrids and compressed biogas engines, Suzuki said at the event.

India's path to electrification may be slower due to lower income levels and supply chain risks.

"Mass EV adoption needs mass affordability," Maruti Suzuki Chairman R.C. Bhargava told reporters on Tuesday.

While wealthy Indians are already buying pricier models, wider adoption will happen only after annual incomes rise closer to US$5,000 (RM21,185), he added.