Suzuki Motor to Invest Close to Rs 70,000 Crore in India in Five Years

Japanese auto giant Suzuki Motor Corp will invest close to Rs 70,000 crore in its largest market, India, over the next five years as it seeks to reverse Maruti Suzuki’s market share losses and achieve a 50% share in the world’s third-largest car market.

Of the total capital investment planned, the automaker plans to invest a significant part of it in capacity expansion, followed by investments for preparation of production of the new models as well for initiatives towards carbon neutrality, and improving quality and efficiency.

About Rs 32,000 crore will be invested in expanding Maruti Suzuki’s production capacity to 4 million units, Rs 23,240 crore in new models and the balance of Rs 15,000 crore in carbon-neutral initiatives, and quality and efficiency measures.

In its Mid-term Management Plan for the financial year 2030, Suzuki Motor Corp has mentioned a total investment of 4 trillion Japanese yen, of which 1.2 trillion Yen (Rs 70,000 crore) will be for the India business.

Suzuki Motor is looking at India as its most important market, which will continue to grow and serve as the engine for the automaker’s future growth. Maruti Suzuki, which once had a market share of over 50% in the Indian PV market, is targeting to reclaim the 50% mark by the end of this decade. 

Maruti Suzuki currently has an annual production capacity of 2.35 million units across three plants – two in Haryana (Gurugram and Manesar) and the Gujarat plant. The automaker has set a target to almost double 4 million units by 2030-31 with plans for two greenfield plants - one in Kharkhoda, Sonipat, and the other in Gujarat.

The Kharkhoda plant, which will have a total annual capacity of 1 million units, will start operations in a phased manner this year with an initial capacity of 250,000 units planned in the first phase. The automaker is yet to finalize the site of the greenfield facility planned in Gujarat.

On the product side, Maruti Suzuki earlier announced plans to expand its portfolio from 18 models to 27 models. In its latest management plan, Suzuki Motor pruned the battery electric portfolio planned by the end of the decade for India from six to four. However, it did not disclose the latest complete portfolio plans.

Suzuki Motor mentioned that there is a need to “rethink its strategy” in India as the business environment in the country has changed due to its declining market share and intensified competition in electric vehicles in the country. 

“The competitive environment is becoming increasingly severe, and the quality of product functions, equipment and services required by customers is increasing,” the company said.

While the automaker will strengthen its product capabilities and lineup in the sports utility vehicle and multi-utility vehicle segments, the strategy also involves rapidly developing and introducing entry-segment products that meet the preferences of entry-level customers.

Suzuki Motor Corp holds around 58% stake in publicly traded Maruti Suzuki, while the rest is held by the public.

On the R&D side, Suzuki Motor will invest 2,000 billion yen globally, primarily for technology development. The company noted that it will prioritize enhancing electrification and software-defined vehicle technologies.