Isuzu bets on pick-up in truck market

It is setting up a green field facility at Sri City in Andhra Pradesh with an investment of Rs 3,000 cr, which will have an annual production capacity of 120,000 units

Despite low demand for pick-up trucks in India, Japanese manufacturer Isuzu is betting big on the Indian market. Isuzu on Tuesday announced it had introduced the D-Max and a sports utility vehicle (SUV) MU-7 in the sub-two tonne category.

It is setting up a  facility at Sri City in Andhra Pradesh with an investment of Rs 3,000 crore. The annual production capacity of this facility would be 120,000 units. The actual production would start in April 2016. Currently, it's D-Max and a sports utility vehicle MU-7 is assembled by Hindustan Motors at its Thiruvallur plant near Chennai, under a contract manufacturing agreement.

Shigeru Wakabayashi, executive vice-president and deputy managing director, Isuzu Motors India said: "The pick up market in India right now is nearly 200,000 units a year. It is expected to grow to 800,000 units a year by 2023. Increased urbanisation and improving road conditions are fueling the need to have more powerful vehicles. India is following the pattern of other developed auto markets."

In the sub-two tonne cargo segment, Isuzu will compete with Tata Motors' Xenon and 207 and Mahindra and Mahindra's Genio and Bolero Maxi trucks.

Recently, Isuzu announced the opening of Viraaj Isuzu, its first sales, service and spares centre in Pune. This is its third dealership in Maharashtra and 27th in India. It will increase the dealership network to 60 by April 2016 and by April 2018, expects to have 180-200 dealerships across India.

Wakabayashi added, "We will take localisation content to 80 per cent to begin with and scale it up to 100 per cent gradually. For now engines will continue to be imported. We are 25 dealers presently and we are confident to take it up to 60 by the time our plant comes up in April."

In the Indian market, Isuzu currently has two offerings - one each in the pick-up (variants of the D-Max) and premium SUV (MU-7) segments. These are priced between Rs 6.09 lakh and Rs 7.74 lakh for the pick-up and Rs 21.27 to 23.77 lakh for the SUV, (ex-showroom) in Maharashtra. Isuzu has also tied up with DC Design for two customisation packages for the SUV from three centres - Mumbai, Delhi and Pune.

Pick-ups with better load carrying capacity (2 tonnes and above) which are popular in Thailand and US are gaining ground in India even as demand for vehicles below this segment continues to witness a decline. As per data from the Society of Indian Automobile Manufacturers (SIAM) the pick-up segment is now bigger than the mini truck segment. With sales of around 140,000 units a year pick-ups outsold 131,000 mini trucks last year.