Suzuki’s Indian operations: Production capacity to expand to 2.25 million vehicles

Sales network to expand to 3,000 dealers, target for annual sales of 2 million vehicles

2017/07/27

Summary
The Indian market: Accounting for half of Suzuki’s global sales
New Gujarat plant comes on stream, production capacity in India to expand to 2.25 million vehicles
Establishment of a battery pack plant with Toshiba and Denso in response to stricter emissions restrictions in India
Expanding sales outlets to 3,000 locations by FY 2020; increasing annual sales to 2 million vehicles
Expansion of the NEXA lineup, entry into new segments, and updating existing models
Reduction of indirect automobile taxes through the implementation of GST, all OEMs to reduce sales prices
Production Forecast by LMC Automotive: Suzuki's light vehicle production to reach 3 million units in the medium term

Summary

The Baleno, Indian-manufactured global strategic vehicle
(Photo: Maruti Suzuki)

Suzuki's global vehicle sales in the fiscal year that ended in March 2017 saw a year-over-year (y/y) increase of 2.0% to 2.918 million vehicles. In India, the OEM's largest market, sales grew a considerable 10.7% to 1.445 million vehicles, which comprises nearly half of the automaker's total vehicle sales.

Suzuki plans to develop India as a global strategic base. Global strategic vehicles will be manufactured in the country to increase supply capabilities for the domestic market and expand exports. A new plant in Gujarat came on stream in February 2017. The first line has an annual production capacity of 250,000 vehicles, but the OEM plans to add second and third production lines to raise the plant's production capacity to 750,000 vehicles. Combined with the two existing plants in Haryana (annual production capacity of 1.5 million vehicles), Suzuki will achieve an annual production capacity of 2.25 million vehicles in India.

The Baleno compact hatchback is manufactured at the new plant in Gujarat. The Baleno was first manufactured at the Manesar plant in Haryana, and was released through the NEXA premium sales network in October 2015. The Baleno has become the best-selling premium hatchback in India, with over 10,000 vehicles sold monthly. Additionally, the Baleno is exported to more than 100 countries and regions as an Indian-manufactured global strategic vehicle. Exports to Japan began at the start of 2016, making it the first Maruti Suzuki vehicle to be exported to Suzuki's home country as part of the Indian government's "Make in India" initiative.

At the end of June 2017, Suzuki announced its aim to achieve annual sales of 2 million vehicles in India in FY 2020. The OEM also plans to expand the number of dealerships to 3,000 and expand its service facilities to 5,000 locations (as of the end of March 2017, there are 2,312 dealerships and roughly 3,200 service facilities). Suzuki is also expanding its NEXA premium sales network that was established in July 2015, and is adding to its lineup of vehicles targeted at the rapidly growing middle-class. Furthermore, the OEM entered new segments by releasing new models such as the Vitara Brezza compact SUV and the Super Carry light commercial vehicle (LCV). Existing mass-market models will also be updated in order to meet Indian emissions restrictions and safety standards.

In April 2017, Suzuki announced it would establish a new lithium-ion battery pack company in India with Toshiba and Denso. The Bharat Stage 6 standard (equivalent to Euro 6 emissions standards) is scheduled for implementation in India in 2020. Suzuki already has released diesel HV models such as the Ciaz and Ertiga in India, but it will further promote the electrification of locally manufactured models.

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