Maruti Suzuki to invest $104 bn in India to make EVs and batteries

India’s largest carmaker hopes to roll out affordable EV models in both Japan and India as early as 2025 from Gujarat plant.

Topics


Electric Vehicles | Maruti Suzuki | Hyundai Motor India

Suzuki Motor said on Sunday it will build a new factory in Gujarat to make electric vehicles (EV) and batteries, aiming to have the business running by 2026 as its Indian unit changes strategy for the green mobility market.

The Japanese automaker will invest around $104 billion on the plant and EV production. Suzuki, which is the parent of India’s largest carmaker Maruti Suzuki and sells one in every two cars in the country, hopes to expand EV sales as the government promotes clean energy vehicles as part of its decarbonisation effort.

Maruti Suzuki has maintained that the Indian market isn’t ready for EV and it has not taken a bullish view of India’s electrification of mobility. Hyundai and Tata Motors, the company’s rivals, have announced plans for electrification of their products. Sales of four-wheeled EVs jumped in India in FY21, unaffected by the coronavirus pandemic. The segment reported the sale of 5,500-6,000 vehicles last financial year and it next expects a jump of 60-75 percent compared to FY20 when the segment saw sales of 3,400 units.

Suzuki, through its global tie-up with Toyota, is gearing up to enter the non-IC engine vehicle business and India will be a major part of this plan. Sources said that the Indian subsidiaries of Suzuki Motor Corporation (Maruti Suzuki) and Toyota Motor Corporation (Toyota Kirloskar Motors) are working on a mass EV product, which will be sold in India and exported to European and South Asian countries.

People aware of the development said the two companies are working to develop a mass EV product, which besides for Indian market will also be exported to European and South Asian countries.

“Investing so much money for the Indian market is not justified as there are still doubts how much the domestic market will grow for EVs. It has to be for export also,” the person said.

“Suzuki’s future mission is to achieve carbon neutrality with small cars,” said Toshiri Suzuki, president of Suzuki Motor Corporation in a statement.

The battery plant will be set up near a Suzuki factory owned by Suzuki Motor Gujarat (SMG), a 100 per cent subsidiary of Suzuki Motor Corporation that makes supplies to Maruti. It recently started a new production line to increase annual production to 7.50 lakh units.

From fiscal 2021 to 2025, Suzuki intends to spend a total of 2.2 trillion yen on research and development and capital investment. Of the total, about 1 trillion yen will go for R&D, most of which will be earmarked for development of EVs.

Suzuki hopes to roll out affordable EV models in both Japan and India as early as 2025, which it hopes will allow it to capitalize on an expected wave of automobile electrification.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor