Suzuki Motor Corporation has announced that it will turn its Indian facility into a production and export hub of small cars. This, it says, will happen gradually once the new Maruti Suzuki factory at Hansalpur in Mehsana district begins operations in 2016.
The news was confirmed by RC Bhargava, chairman of MSIL, who said “Small and large car exports from Japan have already become uncompetitive because of the appreciating yen so Suzuki is instead shifting small car production to India.” The company added that the Japanese facility would eventually cater exclusively to local production.
The main reason behind this move is the appreciating value of the Yen that is eating into profits of most Japanese car makers, alon with few other factors that might have influenced the decision. The chief one being that production (low cost labour+government incentives) and exports (easy access to port) from the sub-continent are much cheaper. There is also the fact that MSIL has a well-established supply base spread out across the country.
Maruti Suzuki already exports vehicles from India but in very small numbers and such a move would boost their income from exports, something it has been trying to do for quite a while now. What this means for us (Indian Maruti Suzuki customers) is that we will get access to the better quality features, accessories and maybe even engines.
The decision might also influence few other Japanese manufactures to follow steps. As for MSI, they will have to soon iron-out all the labour issues once and for all.
