India will see biggest automobile expansion: Shigeru Wakabayashi

Q&A with MD, ISUZU Motors India Pvt Ltd

Japanese auto major ISUZU Motors Ltd is all set to enter the Indian automobile industry by launching two pick up trucks end of this month. The two variants will fit into a segment where Tata, Mahindra & Mahindra and Ashok Leyland are having a stronghold. Besides, the company is also planning to launch a SUV to take on Toyoto and Mitsubishi products.

In an interview with T E Narasimhan, ISUZU Motors India Pvt Ltd Deputy Managing Director Shigeru Wakabayashi spoke about company's plan in India, including a Rs 1,000 crore manufacturing facility and bringing company's global captive financial arm.

How do you see India as a market and what kind of opportunities do you see for Isuzu?

In the next 10 years, India will see its biggest expansion in the automobile industry, which China witnessed in the last 10 years. The capacity will touch as high as 10 million units by 2020, which is a significant number.

Improvement of roadway infrastructure and increase in per capita income have not only led Isuzu Motors but also other major players to view India as an opportunity.

We are very bullish about India's growth story and for the company India is an important market.

Compared to China, still India a cost competitive when it comes to manufacturing?

Certainly India got some competitive advantage including cost. Operating in India is also easy.

For instance, unlike China, there is no obligations which says the Government should own 50% of the company. Managing a company in China is bit complicated, in India it is not only better, but easy also.

You think Isuzu's entry to India is late and when can we expect first product of the company on the Indian roads and what are the offerings on the cards?

No, we dont feel we entered late. Still we have lots of opportunity.

By end of this month two variants of pick up trucks will hit the Indian roads along with a SUV. These products will be imported as a fully built vehicle from Thailand factory.

The products will be priced higher than the competitors, but it will offer better payload, mileage, speed and durability.

The pick up vehicles, which will be in single and crew cabs are priced at Rs 6.65 lakh and Rs 7.85 lakh, while the SUV will be priced at Rs 23.2 lakh.

The LCV product will be positioned in 2.0-3.5 tonne segment, where Tata, Mahindra and Ashok Leyland are dominant players. This particular segment reported a strong growth in 2012. Total units sold was 150,153 as compared to 85,641 units in 2011, an increased of around 75%.

The SUV product will compete Toyota Fortuner and Mitsubishi Pajero.

Isuzu was planning to set up a Rs 1,000 crore manufacturing facility in India. What is the status?

Investment figure and which state yet to be decided. We are looking for a 100 acre land in South India. We want land close to the Port, so that the Indian plant can collaborate with the Thailand factory.

The facility will be ready in the next 3-5 years and will have a capacity of one lakh vehicles a year and major chunk of the vehicles will be pickup trucks, meant for domestic markets initially.

Our products will have almost 100% localisation, which means it will be cost competitive.

Any plans to bring ISUZU Leasing, the captive financial arm, to India?

Going forward yes we will bring, when we cannot say now.