Suzuki''s exports from India targeted at $3 billion

08 August 2006

The likely value of Suzuki's exports from India is expected to be $3 billion. And it's not a distant dream. It could be a reality by 2009. With Europe moving to CO2 emission norms and fuel prices on the boil, carmakers will use India as an export hub. But poor infrastructure is the only roadblock, reports CNBC-TV18.

It was a swirl of numbers that Suzuki Motor Corporation Chairman Osamu Suzuki threw at the media earlier today. But the long and short of it, is that Maruti will add another Rs3,000 crore to its Rs6,000 crore expansion plan.

While Rs4,000 crore will be invested in Maruti's existing Gurgaon plant, Rs5,000 crore will be split between their diesel engine plant and producing their new small car, which will largely be exported.
"The new plant will produce 1 lakh Swifts and 2 lakh new small cars," said Osamu Suzuki, chairman, Suzuki Motor Corporation.

Suzuki Motor Corporation's new small car will hit the market in 2008. One lakh units will be exported to Europe, 50,000 units will be sold to the domestic market while 50,000 units will be supplied to Nissan. But post 2009, total exports are targeted to jump to a whopping 4 lakh cars annually. This means that it will get $3 billion worth of exports, assuming the average price of a small car being exported at about $4,000.

While both Suzuki and Nissan are tight lipped about their alliance plans, CNBC-TV18 learns the alliance is likely to pump in $1.5 billion. Though Osamu Suzuki did not confirm the figure, he did say that both parties are currently looking at the possibility of setting up a new manufacturing facility. Suzuki is likely to pump in Rs2,500 crore.

The plant will be largely for export but will not be a 100-per cent export oriented unit. The alliance has ruled out a non-compete clause in any product category as of now. While India's dream of becoming a small car export hub is close to reality, the lack of infrastructure remains the biggest constraint.

No port with its current capacity can handle 4 lakh cars but CNBC-TV18 learns that the prime minister and finance minister are putting their weight behind addressing these problems.