Suzuki to Pump in Fresh Investment of Rs 3,800 Crore in Gujarat

Japan's Suzuki Motor Corp today announced fresh investments of around Rs 3,800 crore in Gujarat to add a third car production plant. The company along with its partners Toshiba and Denso will also invest around Rs 1,150 crore for a new unit to produce lithium ion batteries.

The new investment in enhancing capacity of the Hansalpur plant will take the company's total investment in the facility to around Rs 13,400 crore, where it has already put in Rs 9,600 crore on two plants along with another engine and transmission production unit.

The Hansalpur-based plant is Suzuki Motor Corp's first wholly-owned unit in India.

Announcing the fresh investments, Suzuki Motor Corp (SMC) Chairman Osamu Suzuki said the company will invest Rs 3,800 crore on the third plant which will have a production capacity of 2.5 lakh units annually.

When the third plant starts functioning fully, the SMC's Gujarat plant will have a total capacity of 7.5 lakh units per annum. He, however, did not elaborate on the time for commissioning of the third plant.

The first two plants also have capacity of 2.5 lakh units per annum, while the engine and transmission unit has a capacity to produce 5 lakh units a year. The overall production capacity of SMC along with its Indian arm, Maruti Suzuki's two plants in Haryana will increase to 22.5 lakh units annually.

Currently, the first plant at Hansalpur produces premium hatchback Baleno. The second plant along with the engine and transmission units is expected to go on stream in 2019.

He said with the new investment, the company's Hansalpur facility will will help in generating employment for 10,000 people, including suppliers. "We will also construct a hospital and school near Hanslapur facility," he added.

Last week Maruti Suzuki India Chairman R C Bhargava had stated that SMC was also considering setting up a fourth production line of 2.5 lakh units at Hansalpur plant to take its total capacity to a million units.

Suzuki said as part of strategy for adapting to new technologies, SMC along with its partners Toshiba and Denso will invest USD 180 million (around Rs 1,151 crore) to manufacture lithium ion batteries.

The batteries will be used for "hybrid vehicles manufactured in India and export these genuinely manufactured in India vehicles to international market", Suzuki said.

The plant is expected to be operational from 2020, he said adding, "We plan to continue with our efforts to promote make-in-India program further". Last year, SMC had joined hands with Toshiba Corporation and Denso to set up a plant in India to produce lithium ion batteries.

The three Japanese entities inked an agreement to form a joint venture to tap growing popularity for electric vehicles in India and supply lithium-ion battery packs in the country.