According to foreign media reports, on February 25, Suzuki’s Indian subsidiary Maruti Suzuki completed the first phase of construction and officially started production in the new Kharkhoda factory in Haryana, northern India. It is expected that the factory will become one of the largest passenger car manufacturing bases in Asia by 2028.
The last time the India’s largest sales carmaker opened a new factory in India was in 2017, located in Gujarat, the hometown of Prime Minister Modi.
Maruti Suzuki’s new factory will eventually accommodate four production units, each with an annual production capacity of 250,000 units, and the factory will gradually expand in stages by 2028. According to a filing from the company, the first model to be on and off the new production line will be the compact SUV Brezza, which is currently being produced at the company’s Manesar plant.
With the new plant, Maruti Suzuki is advancing its expansion plans, planning to increase its annual capacity in India from its current 2.6 million to 4 million as early as 2030.
Although the growth in domestic automobile sales in India is expected to be small this year amid slowdown in overall consumption, the Indian passenger car market is expected to grow to 6 million by 2030, which will consolidate its position as the world’s third largest automobile market.
In its mid-term strategy for 2030, Suzuki has formulated a 4 trillion yen (about US$26.8 billion) investment plan for the Indian market, with a large portion of the funds going to expand its manufacturing infrastructure. Meanwhile, the company has lowered its goal in the electric vehicle sector, reducing the number of pure electric vehicle models originally planned to be launched in India by 2030, from six to four.
Suzuki had previously promised to support Maruti Suzuki to achieve its annual capacity target of 4 million vehicles by 2030, but has now changed its strategy, saying it will “monitor market conditions and gradually move towards that goal at the right time.”
“The competitive environment is becoming increasingly severe, and customers’ quality requirements for product functions, equipment and services are also increasing.” However, despite the increasing competition, India remains Suzuki’s most important market, and Suzuki expects the Indian market to continue to drive its future growth.