Suzuki revamps auto production in India to boost efficiency
Suzuki Motor Corporation, in a bid to bolster efficiency in its automobile production business in India, is restructuring its manufacturing operations. This move is in response to the burgeoning market demand and the global push towards carbon neutrality.
On July 31, 2023, Suzuki, Maruti Suzuki India Limited (MSIL), and Suzuki Motor Gujarat Private Limited (SMG) approved a significant change in their corporate structure. SMG, a wholly owned subsidiary of Suzuki, will now operate under MSIL.
SMG began automobile production in 2017 under a contract manufacturing agreement with MSIL. With the termination of this agreement, SMG will transition into a subsidiary of MSIL, with MSIL acquiring all of SMG’s shares previously held by Suzuki.
The proposed change is subject to approval from MSIL shareholders and the Indian Government. The completion of this transaction is anticipated by the end of the current fiscal year, contingent on the progression of future procedures.
This strategic shift aims to enhance competitiveness by integrating automobile manufacturing in India under MSIL. MSIL has announced plans to construct new plants with a manufacturing capacity of one million units, supplementing the production at existing plants and the upcoming facilities in Kharkhoda, Haryana, slated to commence operations in 2025.
By 2030, MSIL aims to secure a production capacity of approximately four million units in India, with necessary investments planned for this capacity increase.
Simultaneously, Suzuki will leverage Suzuki R&D Center India Private Limited, its wholly owned subsidiary in India, to invest in the development of advanced technologies, electric vehicle (EV) battery manufacturing, and the biogas business, among others.