To invest Rs 1,500 crore in facility to make SUVs, LCVs

Japanese automaker Isuzu Motors today signed up with Andhra Pradesh Government and Sri City for setting up of a Greenfield manufacturing unit which is likely to see an outlay of Rs 1,500 crore.

The facility will come up on a 100-acre site in Sri City located about 55 km from Chennai in Chittoor district of Andhra Pradesh.

After signing up of memorandums with the Andhra Pradesh Government and Sri City, Shigeru Wakabayashi, Deputy Managing Director of Isuzu Motors India, said, "The company manufacturing unit will come up by the end of 2015 and serve both the domestic market and as an export hub."

The plant, with a capacity to manufacture about 1,00,000 LCVs and SUVs, will mainly serve the domestic market. The mix could be about 80,000 vehicles for the domestic market and about 40,000 vehicles for exports, he said.

Till such time the unit gets ready, the company plans to bring in completely built units (CBUs) from Thailand and market them in the India. It has established two outlets at Hyderabad and Coimbatore to help them understand what the market needs.

The automaker is known for the diesel engine technology and its utility vehicles globally. "We use the manufacturing facility in Thailand to support global demand. The Indian unit will serve as a support base initially and gradually become a full fledged unit," Wakabayashi said.

"The Indian automotive industry may be passing through a tough phase now but we believe it has tremendous potential. The market has grown to be fifth largest globally with annual sales of 3.6 million. This is projected to be a 15 million by 2025 to become third largest globally after the US and China," he said.

"Most manufacturing units pave way for ancillaries, and we hope Isuzu unit will also help develop ancillaries," he said.

In talks for local assembly of utility vehicles

Wakabayashi said, "The Company will bring CBUs and market them in India. But given the opportunities, we are exploring the possibility of local assembly to garner market share."

While the company is in talks with several players, it may strike a deal for assembly with Hindustan Motors for manufacture of some vehicles. The company official admitted they were in talks for assembly of utility vehicles.

In talks with local players

Shigeru Wakabayashi, Deputy MD, Isuzu Motors, said: “The company will bring CBUs and market them in India. But, given the opportunities, we are exploring the possibility of local assembly to garner market share.” While the company is in talks with several players, it may strike a deal for assembly with Hindustan Motors for the manufacture of some vehicles.

rishikumar.vundi@thehindu.co.in

(This article was published on March 15, 2013)
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