India signed agreements with units of Japan's Suzuki Motor Corporation for an investment of around $1.4 billion (around Rs 10,600 crore) to produce electric vehicles and batteries in Gujarat.
Suzuki Motor said on Sunday it will build a new factory in Gujarat to make electric vehicles (EV) and batteries, aiming to have the business running by 2025 as its Indian unit changes strategy for the green mobility market. Suzuki is the parent company of Maruti Suzuki, the largest car manufacturer in India which has factories in Haryana and Gujarat.
Suzuki to invest Rs 9,800 crore in India for EV production
Suzuki's investment plan will be part of an announcement by Kishida during his trip of plans
to invest 5 trillion yen over the next five years in India. #ElectricVehicles 1/2 pic.twitter.com/7GsSs1HDDk— Rising Bharat (@RisingBharat_) March 20, 2022
“Suzuki’s future mission is to achieve carbon neutrality with small cars,” said Toshiri Suzuki, president of Suzuki Motor Corporation in a statement.
A memorandum of understanding (MoU) was inked on March 19 at the India-Japan Economic Forum in the presence of Modi and his Japanese counterpart Fumio Kishida – his first visit to the country.
Suzuki pointed out that the EV investment backed Prime Minister Narendra Modi’s flagship Atmanirbhar Bharat initiative.
"We will continue active investment in India to realise self-reliant India," he said at the forum.
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The battery plant will be set up near a Suzuki factory owned by Suzuki Motor Gujarat (SMG), a 100 per cent subsidiary of Suzuki Motor Corporation that makes supplies to Maruti. It recently started a new production line to increase annual production to 7.50 lakh units.
From fiscal 2021 to 2025, Suzuki intends to spend a total of 2.2 trillion yen on research and development and capital investment. Of the total, about 1 trillion yen will go for R&D, most of which will be earmarked for development of EVs.
Suzuki hopes to roll out affordable EV models in both Japan and India as early as 2025, which it hopes will allow it to capitalize on an expected wave of automobile electrification.
Maruti Suzuki had until now maintained that the Indian market isn’t ready for EV while its arch rivals Hyundai and Tata Motors have announced plans for electrification of their products.
According to media reports, Maruti Suzuki and Toyota Motor Corporation are working on a mass EV product, which will be sold in India and exported to European and South Asian countries.
A total 5 trillion yen Japanese investment package over the next five years was announced on Saturday for India during Japan Prime Minister Fumio Kishida's visit. It is not clear at this point whether the investment by Suzuki forms part of this larger package or is a separate deal.
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