Japanese automotive company Isuzu is planning big for India beginning with the introduction of light commercial vehicles, pick-up vans and its sports utility vehicle, a Toyota Fortuner-competitor.
Testing the market with two dealerships in Hyderabad and Coimbatore, with the completely built units imported from its plant in Thailand, Isuzu plans to take the assembly route and follow this up with a full-fledged manufacturing base in India.
Shigeru Wakabayashi, Deputy Managing Director, Isuzu, believes India is at the same point what China was about 10 years ago. But the interesting aspect in India is that its automotive market could grow much faster than that of China over the next decade and become second largest market.
During his visit to Hyderabad, in his first interface with media, he outlines plans for the $17-billion Tokyo-based Isuzu Motors. It is beginning India journey with D-Max regular cab (Rs 6.87 lakh), Crew Cab (Rs 8.09 lakh) and MU-7 (Rs 23.75 lakh).
Are you not a very late entrant into India. Some of your Japanese counterparts such as Suzuki, Toyota and Nissan have already made big inroads?
We believe, India is at a point China was about 10 years ago at about three million cars a year. While the Chinese market is now close to about 20 million a year, India has immense potential for growth. Its growth will be at much faster pace than in China given the size of the economy, per capita income levels, and overall expectation of the automotive companies from all over the world.
How will you go about building your base in India?
We have begun very small with first dealership in Hyderabad and second will be in Coimbatore.
We will initially concentrate on Andhra Pradesh and Tamil Nadu as we assess the market and grow our business. Once this pilot phase is completed, we will look at the manufacturing base.
Which segments are you looking in India?
We are keen to take part in the LCVs, pick-up range, and SUVs segment pitting MU-7 against Toyota Fortuner and others in the market.
The cargo movement in India will slowly but surely shift to roads. As India develops roads and seeks to move goods much faster between cities, the demand for warehouses, cold chains for food will go up. This will open up a big market for LCVs and pick-ups. These will be imported from Thailand.
Will the free trade agreement down the line help bring down costs and change business mix?
Yes it will. But when we are looking at the Indian market from a much bigger plan, we will need a large local supplier network and eventually a manufacturing base.
There were couple of reports suggesting that you have chosen Andhra Pradesh for your manufacturing base?
We are yet to finalise our plans for the manufacturing base which will have the capability to roll out one lakh units a year. This unit will have capability to employ at least 2,000 people directly. The market feasibility is under way and negotiations are going on with couple of States.
How much do you see investing in the plant?
It has still not been frozen as plans on the project are under way. But given the long-term prospects in India, Isuzu will need the manufacturing base to be a significant player. If all the elements of the manufacturing —press shop, welding, painting, final assembly and engine plant — are set up, it will require substantial investments. The company board has to approve it.
A manufacturing unit will help us to cater to the domestic market initially and later help develop it as a base for some of the markets in the region.