Suzuki Motor is close to confirming a new passenger car plant in Gujarat, western India, costing as much as JPY100bn yen.
Sources told Kyodo News the move to build the plant in the area, an important base under the Japanese-Indian infrastructure project known as the Delhi-Mumbai Industrial Corridor, would be Suzuki’s first step to boost its overseas production since it decided this week to unwind an alliance with Volkswagen.
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After conducting a geological survey to study earthquake risks in the area, the Japanese automaker will make a final decision at a board meeting at the end of October, the sources said.
Gujarat state is already home to Suzuki’s key export port and ideal for a new plant, the sources added.
The plant will add annual capacity in stages, eventually targeting 1m units.
Suzuki already produces passenger cars at two plants in Haryana in northern India where there is currently industrial strife over union membership. These factories are expanding but are limited to about 2m units a year.
Suzuki sees potential for growth from 2015 on, with fiscal 2019 total industry sales projected at 8.5m units, hence the need for another plant, the sources said.
Volkswagen executives said at the Frankfurt show they would go it alone on small cars in India and elsewhere if, or as seems more likely, now the alliance with Suzuki ends.
