Rs 69K cr capital expenditure to fuel Suzuki's India growth engine

Suzuki Motor Corporation (SMC) has unveiled an ambitious road map for India, earmarking 1,200 billion yen (Rs 69,320 crore) for its subsidiary Maruti Suzuki India (MSIL) between FY26 and FY31. The corpus will be directed towards expanding production capacity, establishing manufacturing units and achieving carbon neutrality goals, the Japanese auto major said in its outlook released on Thursday.

  MSIL expects its domestic passenger vehicle (PV) sales to grow from 1.79 million units in 2023-24 (FY24) to 2.54 million units by 2030-31 (FY31), reflecting a 41.9 per cent increase, even as competition in the Indian market becomes “increasingly severe”, SMC said. 

SMC stated that MSIL will establish a production system capable of producing 4 million units annually in the next 5-6 years to meet India's demand and expand as an export hub. “However, we will not rush to achieve 4 million units (annual capacity) by 2030 at any cost; instead, we will implement this plan at an appropriate time, considering market conditions,” it said.

         

Of the total aforementioned capex amount, ¥550 billion (Rs 31,771 crore) will be allocated towards expanding production capacity and establishing manufacturing plants, ¥400 billion yen (Rs 23,107 crore) for model development, ¥150 billion yen (Rs 8,665 crore) to quality and efficiency improvements, and ¥100 billion (Rs 5,777 crore) towards the "Suzuki Smart Factory" initiative. 

 

This initiative will integrate advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), cloud computing, big data analytics, and augmented reality (AR) to enhance manufacturing efficiency and sustainability.

 

SMC has also revised MSIL's electric vehicle (EV) road map.

 

It plans to launch four EVs by FY31, a reduction from the six models it announced in January 2023. Despite this adjustment, MSIL remains committed to its target of EVs making up 15 per cent of its total sales by FY31 and aims to be "number one" in production, exports and sales of EVs.

 

EV sales growth in India slowed in 2024, with 99,165 electric cars sold, marking a 20 per cent year-on-year (Y-o-Y) increase, according to the Federation of Automobile Dealers Associations of India Fada.

 

Moreover, EV penetration—measured as the share of electric cars in total car sales— in India remained low at just 2.5 per cent. MSIL had last month unveiled its first electric car E-Vitara in India. MSIL will offer customers options such as electric vehicles (EVs), hybrid cars, CNG-run cars and flex fuel-run cars, tailored to the "specific circumstances across different regions" in India, SMC stated.

 

MSIL is currently constructing two manufacturing plants -- in Haryana and in Gujarat -- to boost its annual production capacity.

 

"In India, our most critical market that continues to grow, we aim to achieve a 50 per cent market share as a leading automobile company...We will strengthen our product offerings in the SUV segment, which has become the largest, and the MPV segment, which is expected to grow. Additionally, we will focus on enhancing entry-level models to ensure that the increasingly growing middle-class customers choose Suzuki for their first car purchase," SMC stated.

 

"The competitive environment is becoming increasingly severe, and the quality of product functions, equipment and services required by customers is increasing," it noted.

 

On the key export markets of the Middle East and Africa, SMC stated that as they are geographically close to India, and as the road conditions and customer needs are similar in some countries, MSIL will leverage Indian-made models to expand its presence and increase sales and profits. 

 

Leveraging its strength in existing businesses, SMC will embark on a slew of launches in the service mobility and energy sectors. This will include "minicar-sized vehicles" business in collaboration with US-based Glydways and "compact three-seater air mobility" business in partnership with Japan-based Skydrive.

 

SMC said that it is also working on a new project to install and operate a biogas plant in India to produce biogas from cow dung and paddy straw and use the produced gas as fuel for CNG-run vehicles. The auto major added that it expected the share of CNG-run vehicles to be about 35 per cent of MSIL's total sales.