Suzuki to Roll Out New Car from India

Japan's Suzuki Motor said Dec. 11 its next new car will come from India, targeting European buyers, as it invests $1.8 billion in making the nation a global production hub. Suzuki Motor Corp, an early entrant into the Indian market when the billion-plus nation began opening up its economy in the 1990s, is ramping up output with its Indian unit Maruti, maker of half of all new cars in India.

Maruti Suzuki India, owned 54.2% by Suzuki, will unveil a "concept version" of the new car at the Auto Expo next January in New Delhi.

The new A-segment one-liter engine, five-door hatchback will be called the "A-Star." It will be the fifth global car from the Suzuki line-up after the Swift, the Grand Vitara, the SX4 and the Splash. Production of the new car will begin in October 2008 at the company's plant in Manesar on the New Delhi outskirts. The environmentally friendly car would boast lower CO₂ emissions than its European rivals, the company said.

The $1.78 billion investment to be spent on manufacturing facilities includes the capital expenditure for production of the new car. It comes on top of plans announced in October to spend $1.75 billion in research and development.

Some 50,000 of the new cars will be earmarked annually for Indian buyers and 100,000 for Europe, the company said. The plans to export cars from India mark a strategy shift by Suzuki which has not until now used the South Asian country as an export base. The announcement underscored the importance of the fast-growing Indian car market to Suzuki after its Indian unit outstripped its parent in sales in their home markets in the first half of the year for the first time ever.

Suzuki Motor aims to get about 70% of its global revenue from outside Japan this year. Europe now represents some 15% of global vehicle sales.

Maruti Sukuki, the leader in the main small car market, must fend off competition from Indian rival Tata Motors which aims to launch a $2,500 car next year as well as another low-cost car planned by France's Renault. Suzuki plans to boost Maruti Suzuki's production capacity to 960,000 cars by 2010 to meet burgeoning Indian demand in the fiercely competitive market.