Suzuki Motor turns, targets Rs 10,440 cr investment into EV’s by 2025

Japan’s leading automaker and Indian market leader  Suzuki Motor Corporation has finally announced that it will invest Rs 10,440 crore or 150 billion Yen in the electric vehicles and battery segment in India. Its Indian subsidiary Maruti Suzuki may launch electric car models both in India and Japan by 2025. This is the first major commitment in the EV segment by Suzuki Motor as far as the Indian market is concerned. The move by Suzuki(Maruti) matters simply because of its status as the mass market leader with over 50% market share, and it’s core focus on affordability above all else.  There is a legion of Indian buyers who will look to switch only when they see an offering from Suzuki, considering their previous experience with its offerings, as well as the massive advantages it brings with its dealer and workshop network etc.

Specifically, Suzuki Motor will be investing about Rs 3,100 crore to increase the production capacity of its electric vehicles in India. Besides, there will also be an investment of Rs 7,300 crore to build an electric batteries’ manufacturing facility by 2026 near an existing car manufacturing facility of Suzuki Motor Gujarat (SMG). The existing manufacturing unit has a new production line which has increased the vehicle’s annual production capacity to 750,000 units.

The company said that it has signed a Memorandum of Understanding (MoU) with the Gujarat Government at India-Japan Economic Forum held in New Delhi, in the presence of Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi. The move comes even as fuel prices in India are set to spike to their highest ever levels on the back of global crude oil movements.

Suzuki already has a global partnership with Toyota to enter the non-IC engine vehicle business. India is a key part of this tie-up. Suzuki Motor Corporation (Maruti Suzuki) and Toyota Motor Corporation (Toyota Kirloskar Motors) are key subsidiaries of the two parent companies. Toshiri Suzuki, president of Suzuki Motor Corporation, said, “Suzuki’s future mission is to achieve carbon neutrality with small cars.” The battery plant will supply to any EV launches by Toyota in India too.

It has been reported that Suzuki and Toyota undertake mass production of electric vehicles that will help the exports to Europe and other South Asian markets.

Suzuki is expected to invest about 2.2 trillion Yen on R&D and capital requirements between 2021 and 2025. About 1 trillion Yen will be for R&D and most of the R&D is expected to take place in the electric vehicles’ segment.

Suzuki has already built a Lithium-Ion battery manufacturing facility at Hansalpur in Gujarat. It’s in a joint venture with Denso Corp and Toshiba. Manufacturing will start by the end of 2022.

The move from Suzuki was long awaited as until now, the firm’s Indian management has been relatively skeptical of the EV market in India, mainly on account of what it saw as the low potential for high volumes. This announcement probably signals a changing mindset that the situation could finally be reversing in the next 3-4 years. In 2021, total EV auto sales in the Indian market were just  14,800 units, as compared to ICE vehicle sales of over 3 million.