Twenty six years after launching its cars in the Indian market teeming with potential middle class consumers, automobile maker Suzuki MotorCorp is taking cost-effective car models conceived by its Indian subsidiary Maruti to its home market Japan.
Maruti’s A-Star will be the first to hit the Japanese market where even Korean auto giant Hyundai Motors retracted as severe competition had jeopardised its growth plans.
“The way Maruti cars are capturing global market, Japan is not far away. A-Star meets stiff emission norms of Europe and is a fit case to be marketed in a highly developed market like Japan, where every global car maker has to sweat to sell cars,” said Maruti Suzuki Managing Director S Nakanishi.
Though it was launched only twenty months ago, Maruti’s A-Star hatchback forms 25% of the total eight lakh cars it exports. Maruti is developing a host of contemporary models for the future. Some of these would be small cars.
Suzuki is already a leader in small cars and WagonR (it’s bigger variants are sold in India under the same name) is the best selling Kei car (super small cars sold with 660 cc engines) in Japan since 2003. “We have significant sales of smaller Kei cars with some of our models being market leader in Japan. These are compact yet sophisticated cars, a marvel of nano design coupled with smallest engines produced in the world. With the Indian market maturing fast, locally made car will also be sold in Japan by us in the near future,” Mr Nakanish added.
Japanese carmakers are shifting manufacturing bases to low-cost countries to cash in on cheaper labour cost and frugal engineering. Nissan has shifted the manufacturing base of its compact car Micra from UK to Chennai in India for its global markets and Thailand for South East Asia and Japan. Honda will produce its Brio compact hatchback for global markets from Greater Noida in north India.
For Suzuki, the game is already shifting to overseas subsidiaries-India, China and Hungry which contribute over 70% to its total volumes, while the company faces hard times in the stagnant Japanese market. New vehicles sales in Japan, driven by government incentives rose 7.5% to 49.54 lakh units, which included 17.26 lakh units of Kei cars, while the Indian market grew 31.43% to 23.86 lakh cars.
Maruti’s place is growing in Suzuki’s global plans. While its contributes more than half of the SMC’s profits and produced around 33% of its consolidated turnover every year which was only 10% in 2005-06. Suzuki plans to invest Rs 6,000 crore in India by 2015 to take Maruti’s annual production capacity to 17.5 lakh and set up a new R&D centre that will help it produce cars for global market on its own.
