TOKYO: Japan’s Suzuki Motor said yesterday it will push back the opening of its new car plant in India by one year to 2017 due to a sharp market slowdown in the country.
The leading automaker’s local unit Maruti Suzuki was due to set up the new factory in India’s western Gujarat state in 2016.
But the company yesterday announced a new fully-owned unit, Suzuki Motor Gujarat Private Ltd, to build the plant with an investment of 50bn yen ($487m).
The new plan is aimed at reducing the cost burden on Maruti Suzuki, which was hit by deadly labour unrest in 2012, as the subsidiary grapples with a sharp market slowdown.
India’s car sales fell almost 10 percent year-on-year in 2013 in the first decline for 11 years, according to the Society of Indian Automobile Manufacturers, amid sluggish economic growth and higher fuel costs and interest rates.
“We have reviewed the plan following the recent tough market situation in India,” a Suzuki spokesman said, adding that the new plant will begin production in 2017 with an initial capacity of 100,000 vehicles a year.
In previous years, car sales in India registered annual growth of 20 to 30 percent, prompting foreign automakers to make a beeline as they sought to boost sales globally.
But stuttering demand in 2013 has forced automakers to introduce interest-free repayments and huge discounts, while some top vehicle makers have cut production.
AFP
