Suzuki Motorcycle mulls 2nd plant in India, to invest Rs 500 crore

Suzuki Motorcycle India Pvt Ltd (SMIPL), the wholly-owned two-wheeler arm of Suzuki Motor Corp, is considering setting up a new plant in the country that could entail a minimum investment of Rs 500 crore, said a top company official.

SMIPL, which today launched its new 155cc cruiser model Intruder priced at Rs 98,340 (ex-showroom Delhi), will also exit from commuter segment motorcycle to focus on premium bikes and scooters as it chases one million unit sales annually by 2020 in India.

"Our target is to sell one million units by 2020. Up to one million we can use the existing plant (at Gurugram) but beyond that we have to consider a new plant. We expect to take a decision on it by next year," SMIPL Managing Director Satoshi Uchida told PTI here.
 

Right now the company is considering various options for the location of the second plant and possible production capacity.

"From market point of view, south India is our biggest. So in terms of proximity to market, south is a good option but then from the operational point, if we have two plants next to each other in Haryana it will be lot easier to manage," he added.

When asked about investments, he said: "The minimum investment would be Rs 500 crore."

The company's current plant in Haryana has an annual capacity of 5.4 lakh units. It is spread over 10 acres out of a total of 37 acres available for future expansion.

Bullish on the Indian market, Uchida said: "Last fiscal we sold 3.5 lakh units and this year in the first seven months we have already reached the mark."

In order to increase sales volumes here, he said:"We will introduce one to two products every year in India."

However, Uchida said the company will stay away from the commuter segment motorcycle in view of the upcoming stricter safety and emission norms in the country.

Government has mandated that by April 2019 two-wheelers must have anti-lock braking system (ABS) or combined braking system (CBS) in order to prevent skidding while braking and enhance safety to riders. By April 2020, BS VI emission norms will also kick in.

"Going forward we will be focusing only on 150cc plus motorcycles and scooters segment. Upgrading our commuter bikes to meet those norms will make them more expensive and unviable," he added.

While on a premium bike, there will only be 10 per cent increase in price, in commuter segment it could be as high as 30-40 per cent, he added.

Till 2020, the company will continue to produce its commuter segment motorcycle model Hayate for exports and serve markets in north India, where demand for such bikes is still big, he added.