Japan’s Suzuki Motor (7269.T), opens new tab will invest 700 billion rupees ($8 billion) in India over the next five to six years, its chairman said on Tuesday, as production of the automaker’s first electric vehicle began.
Through its majority stake in Maruti Suzuki (MRTI.NS), opens new tab, Suzuki Motors already produces 17 models in India for export to around 100 countries, including back to Japan. It will now also become the global production hub for the company’s electric cars.
Maruti will export between 50,000 and 100,000 of the EVs a year, its chairman RC Bhargava said. He added that there was not yet a timeline for a launch in India, the world’s third-largest car market in which Suzuki commands a leading 40% share, in part due to the high cost of batteries that would push up costs for price-conscious local consumers.
The e Vitara will compete with Hyundai’s (HYUN.NS) Creta and Mahindra’s (MAHM.NS) XEV 9e.
EV sales growth in India is still outpacing the overall car market and electric models account for about 4.5% of all cars sold in the current fiscal year from April 1. The government is maintaining a target of a 30% share by 2030.
The Gujarat plant is set to become one of the world’s largest automobile manufacturing hubs, with a planned capacity of 1 million units, said Suzuki Motor chairman and president Toshihiro Suzuki.
It is surrounded by low-lying industrial units housing suppliers to Suzuki and other companies in the area.
Indian Prime Minister Narendra Modi, who attended Tuesday’s event and plans to visit Japan next week, said the plant, including the e Vitara, was a “big leap” towards the government’s ‘Make in India’ goal.