Isuzu Motors MD. ‘We will drive change’

Isuzu Motors is set to make India its regional hub with its new plant at Sri City likely to be commissioned early next year. Located in Chittoor district of Andhra Pradesh, it is well connected from Chennai and Krishnapatnam ports with an added plus in the form of the Bengaluru-Chennai Industrial Corridor. Shigeru Wakabayashi, Deputy Managing Director of Isuzu Motors India, details the roadmap ahead in an email interview. Excerpts:

When is the AP plant due to kick off operations?

Isuzu began civil works on its proposed manufacturing plant site in Sri City in January 2014. Construction is on schedule and we are likely to commence commercial operations by early 2016 with initial production capacity at 50,000 units per annum. This can be scaled up further to 120,000 units annually in the future. It is an exemplary showcase of Isuzu’s long term commitment to the Indian market.

What is the investment planned and when will the first batch of vehicles roll out from the plant?

Isuzu has earmarked an overall investment of Rs 3,000 crore for the project. The start of production of the first batch of vehicles will begin in the second quarter of 2016. We are also looking at achieving 80 per cent localisation at start of production and aiming at 100 per cent in the future.

Do you plan to expand the range of vehicles at the plant beyond the D-Max and MU 7 SUV?

Yes, Isuzu will expand its product offering beyond its current product portfolio in the future. The Indian commercial and utility market will significantly expand in the years to come and we will be fully equipped to drive change in the market with our world-class product offerings. Our current focus will remain in marketing the D-Max pickups and MU-7.

Isuzu Motors is also optimistic about the market potential it has for its D-max range of trucks. The company is targeting specific segments operating in the business of food & catering, perishables, pharmaceuticals, glass and plywood, apparels, service van and distribution. These customers have been recommending these products to their business associates and their peer groups.

With our own manufacturing plant to be operational by the second quarter of 2016 backed by our growing network, we will be fully equipped to meet the demand and requirements of the market in future.

Will the Hindustan Motors contract manufacturing association continue after the new plant?

The company is yet to take a call on this arrangement with Hindustan Motors post commissioning of its Sri City plant. However, we will continue to assemble the products at the HML production facility near Chennai to cater to the current needs of the market. The new plant will be at par with global standards and will become a manufacturing hub for emerging markets in the future. We will certainly explore export opportunities but the initial focus will be on the domestic market.

You had indicated to AP Chief Minister, N Chandrababu Naidu that 40 ancillary units were willing to come to India. What is the progress on this?

Isuzu has signed an MoU with the AP government to facilitate investment by its auto component suppliers in the State. During the launch of the industrial mission by the Chief Minister, quite a few Isuzu-nominated suppliers signed MoUs to explore possible investments.

The new Automobile and Auto Component Policy 2015-20 has encouraged component makers to invest in the State. Indeed, with the help and proactive support of the AP government, Isuzu is taking necessary steps to build the supplier ecosystem for a mutually beneficial future.

Will more Japanese suppliers then set up base in Sri City?

We are a global company with a global supplier base. Quite a few of them are already present in India. We evaluate all the short-listed vendors including our global suppliers at various levels of criteria to comply with our quality and efficiency standards. We have been seeing greater interest levels from component manufacturers willing to be a part of our long and exciting journey ahead.

The management at Isuzu Motors and Isuzu Motors India met with the supplier fraternity in India at its recently concluded conference in Chennai. Nearly 90 component companies participated in the conference to be aligned with the business plans of the company.

We are currently working with our supplier partners to explore possible investments in the state for a mutually beneficial business relationship. The process of identifying appropriate supplier partners started way back in 2013 for operations to begin in 2016. Necessary steps are being taken to ensure greater levels of efficiency and quality across its suppliers to achieve its target of 100 per cent localisation in the future.

Isuzu and Mitsubishi Corporation recently inaugurated a new Automotive Skill Training Centre in Government ITI, Tirupati to impart training in best practices in automobile engineering and technology. The training aims at aligning supply and demand.

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