Isuzu Motors is in discussions with General Motors India and Hindustan Motors to manufacture its SUVs and pick-up trucks under contract.
The decision is likely to be taken in the next few months, reported India’s Economic Times.
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Isuzu is planning to establish its own greenfield manufacturing facility in India. It wants to trial the market with a smaller operation untill then. It has recently launched two products – the D-Max pick-up truck and the MU-7 SUV in Hyderabad. If the deal happens on time, it will start local assembly of the two vehicles in Coimbatore in a year.
“It will take three to five years for our own manufacturing facility to become operational. Till that time, we want to test the Indian market with our small operation. We are in talks with several players for contract manufacturing and a decision is likely to be taken shortly,” said Shigeru Wakabayashi, deputy MD, Isuzu Motors India.
“Talks are on and if both parties arrive at an understanding, then our relationship may fructify in the coming days,” said Uttam Bose, MD and CEO of Hindustan Motors.
“Mitsubishi has a stake in Isuzu and it is helping them set up a base in India. Since Mitsubishi deals directly with HM, there is a very strong possibility of Isuzu trucks being assembled at HM’s plant in Chennai. But then GM is also a global partner of Isuzu, and with both GM-Isuzu planning to join hands to develop a pick-up truck, India could well play an important base. Both options are open,” sources close to the move said.
A Mitsubishi team and Isuzu India are working to plan Isuzu’s local strategy.
“Isuzu is a global partner of GM and if any product or collaboration takes place in any market, we will announce. We don’t have anything to announce for the Indian market,” Lowell Paddock, GM India’s MD, said.
“There is no other market in the world which is expected to grow at a pace that India will. We expect the pick up truck market to double in the next three years and grow fivefold this decade and we want to have a strong base here,” Wakabayashi said.
By 2018, the Indian market has a potential to account for 10% of the company’s global volumes, Wakabayashi said.
Isuzu Motors was in discussions last July with the government of Andhra Pradesh and Tamil Nadu to establish 100,000 unit facility, which involves an investment of more than INR10bn (US$182.2m). Wakabayashi said the plant would be operational by 2015.
