Suzuki Motorcycle to invest 1.5 billion to expand capacity

Wednesday, 19 September 2007, 07:00 Hrs
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Bangalore: Suzuki Motorcycle India (SMIL), a wholly owned subsidiary of the $30-billion Japanese auto major, will invest 1.5 billion over the next 12-18 months to expand the installed capacity of its Gurgaon plant and roll out new models in motorbike and scooter segments.

"We have already invested 3.5 billion since 2006 to set up the plant in Haryana with an installed capacity of 100,000 and added another 70,000-unit capacity this year to foray into the scooter segment," said SMIL joint managing director Katsumi Takata.

"The additional investment will take the capacity to 220,000 units in the next fiscal (2008-09) for launching three more models - two in the motorbike and one in the scooter segment," he added.

Takata was speaking at the launch of Suzuki's Access 125 gearless scooter in the south Indian market here Tuesday.

Although Suzuki was the first overseas firm to have entered India in partnership with the Chennai-based TVS Ltd in the late eighties to introduce the two-stroke 100cc motorcycle Ind-Suzuki, the mandatory three-year lock-in period after pulling out of the joint venture (JV) delayed its entry into the Indian two-wheeler market, second largest after China worldwide.

"As per the separation terms with TVS in 2002, we had to wait for three years to enter the Indian market on our own. Overwhelming response to our two motorcycles and increasing sales have emboldened us to expand our capacity and launch new models every 6-8 months in both the segments," Takata pointed out.

While motorcycles dominate the two-wheeler market in India, mid-size gearless scooters have been making inroads over the last couple of years, thanks to its utility value, convenience and comfort.

"Motorcycles are mainly for men and are used for their masculine features such as power, speed, style and mileage. A growing economy and greater mobility have made personal transport imperative for short distances and use by all family members. Those who cannot afford a car yet, buy scooters for everyone's use," Takata said.

Post-expansion, Suzuki plans to increase the production share of scooters to 40 percent of the installed capacity, with the rest of the assembly line to be used for motorcycles with higher horsepower.

"The medium-term target is to increase our market share to 4 percent by 2010 from 1-2 percent by the end of this fiscal and 10 percent in the long-term with a slew of products and models in both segments over the next 5-8 years," SMIL vice-president Atul Gupta said.

To expand its market presence, the company is doubling its dealer network across the country over the next 12-18 months from 145 dealers currently. It plans to focus equally in non-metros and towns for a share of the steady growth witnessed in such regions.
Source: IANS
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