Suzuki Motor to fortify Indian presence with new EV investments, observes GlobalData

Following the news that Suzuki Motor plans to invest INR104.4bn (US$1.37bn) in its Indian factory to produce electric vehicles (EVs) and batteries;

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:

“The investment, which focuses on three areas EV manufacturing ($407m), battery production ($960m) and vehicle recycling plant ($6m), will further reinforce Suzuki’s position in India.

“Though Japanese automakers were late to shape up their BEV strategies, they are now in the race and gearing up for the highly competitive market. Suzuki Motor announced its strategy last year to enter at a full-scale BEV development by 2025, it has also tied-up with Toyota Motors for the purpose.

“India remains key to Suzuki’s business strategy as it accounts for 52.4% of the company’s total sales. Maruti Suzuki has recently been active in ceasing the diesel models and increasing its CNG product offerings. It had also announced to promote penetration of hybrids and introduction of BEVs in India, last year.

“The EV investment can write new fortunes for Maruti Suzuki in India which has been slightly losing its share to other automakers, primarily Hyundai and Tata Motors in ICE vehicles. EV market in India is still under creation with only a few players offering mass-market EV products including Tata, Mahindra, Hyundai and MG Motors. India registered sale of 13,543 BEVs in 2021, which is expected to grow by 39% CAGR over next decade, according to GlobalData.

“Another area which restrains India’s growth to electrification is the absence of a local supply chain. Establishing a domestic battery production unit will help Suzuki and India to build a stronger supply chain and develop a complete EV ecosystem. The investments could flow into the next phase of the existing battery manufacturing venture between Suzuki Motor Corp., Toshiba and Denso named TDS Lithium-Ion Battery Gujarat Private Limited (TDSG). The joint venture was announced in 2017 with an investment of $180m targeted to manufacture 30 million lithium-ion cells per year by 2025, with a production capacity of more than 1GWh. Also, the electric version of WagonR has been spied multiple times and is a much-awaited product. Synergy between Indian and Japanese market i.e. high demand for small cars will act in favor of the company’s BEV strategy.”

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