Suzuki Motorcycle in talks with AP, Telangana for new plant

Suzuki Motor Corporation is in talks with the governments of Andhra Pradesh and Telangana for setting up its second two-wheeler plant in India. At present, its scooters and motorcycles roll out of a facility in Gurugram, Haryana, which has been home for over a decade now.

“We have some proposals which are being examined. These are predominantly from the South with Andhra Pradesh and Telangana proactively leading the way,” said Sajeev Rajasekharan, Executive Vice President, Suzuki Motorcycle India, the local arm of the Japanese parent.

A final decision will be taken in the coming months so that there is enough time to start work on the new plant and have it up and running over the next three years. By that time, Suzuki will have reached peak production capacity of one million units annually at Gurugram.

Advantage AP?

“The South is a large two-wheeler market and it makes sense to have a location there to complement our operations in the North,” added Rajasekharan. It now remains to be seen which State will eventually bag the Suzuki mandate though AP has the upper hand going by its recent track record of attracting a host of automotive brands.

The list includes Kia Motors, Isuzu, Apollo Tyres, Amara Raja Batteries with Hero MotoCorp also tipped to join the parade. Telangana is home to the ZF Technical Centre but still has a lot of catching up to do with AP. Eventually, Suzuki will take the final call and the choice will boil down to fiscal sops, access to a robust ancillary supplier base as well as a port (both of which neighbouring Tamil Nadu can comfortably offer).

Exports will become an important part of the Suzuki two-wheeler business plan for India as its role grows to become a critical manufacturing hub for the world. The company hopes to wrap up this fiscal with sales of five lakh units while targeting seven lakh for 2018-19 and going up to a million units by the end of this decade.

Focus on premium bikes

However, it is still way behind Hero and Honda, which account for over 13 million units annually between themselves, as well as TVS Motor and Bajaj Auto. Suzuki will also have to catch up with Royal Enfield and Yamaha and it will be interesting how the next three years pan out in this fierce tug-of-war.

The company has been operating in India since the 1980s when it first entered into a joint venture with TVS before parting ways in 2001. Over the years, it has just not been able to make a dent in this competitive market and has only lately changed its strategy to focus on premium bikes and scooters while steering clear of the commuter segment.

“We have a strong brand in scooters thanks to the Access 125 and need to replicate this in motorcycles,” said Masahiro Nishikawa, Executive General Manager, Suzuki Motor Corporation, on a recent visit to India. He admitted that the company has been “struggling to sell motorcycles” since its inception but things have changed lately with the success of the Gixxer.

“We are now a lot more confident and in a better position to build from here and establish our brand in motorcycles,” said Nishikawa. From Suzuki’s point of view, there are reasons to feel confident thanks to a new generation of young Indian buyers on the lookout for “emerging motorcycle categories”. This is where the company hopes to tap its global expertise in big, powerful bikes which can “offer everything in premium and performance”.

Nishikawa reiterated that beyond production numbers, Suzuki would focus on building a good dealer network with the right products to ensure that customers have nothing to complain about. India accounts for over 30 per cent of Suzuki two-wheeler sales (3.63 lakh of 1.19 million units sold between April-December 2017) and this component will increase in the coming years.

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