Isuzu to increase local output to cut costs

To set up a Rs 3,000-cr plant in AP, buy engines locally

Tokyo, Japan-based pick-up and sports utility vehicle (SUV) maker Isuzu Motors is talking to local makers for buying engines for its models in India, a top official said on Tuesday. The Japanese company, known for its diesel engines globally, is looking to source these to increase localisation and cut costs. Isuzu did not name the companies it was talking to. The company entered India two years ago and retails the D-Max pick-up truck and MU-7 SUV through a limited distribution network.

It imports engines from its Thailand unit. The Thai unit also supplies knocked-down parts of the SUV and the pick-up, which get assembled at Hindustan Motors’ Chennai plant. Around 500 vehicles a month are assembled at this plant, including 300 pick-ups.

Takashi Kikuchi, managing director and President, Isuzu Motors India, said, “We will decide on buying engines locally very soon. We are talking to a few companies already. We want to increase the localisation content.”

Kikuchi was speaking here on the sidelines of the opening of a dealership for the D-Max single cab, which comes at an introductory price of Rs 5.99 lakh (ex-showroom, Mumbai). The space cab variant costs Rs 6.19 lakh and the flat deck Rs 7.09 lakh.  

Isuzu is also setting up a Rs 3,000-crore plant in Andhra Pradesh that would be able to produce 120,000 a year; it is expected to start operations in April 2016.

The company officials said a local engine factory as well as a research centre for developing vehicles in the country could also be explored. This would entail further investment.

Isuzu aims to raise the number of dealers in the country to 60 from 10 now by 2016. The domestic pick-up market is around 200,000 units a year and expected to grow to 800,000 units a year in a decade, according to Isuzu.