Bullish on the Indian market, Suzuki and Maruti on Thursday scaled up their investment plans for the country by Rs 3,000 crore (Rs 30 billion), taking the total to Rs 9,000 crore (Rs 90 billion), and announced they would start contract manufacturing for Nissan from 2008-09.
Suzuki chief Osamu Suzuki, on a visit to India, said that the companies would not only expand operations and production in the domestic market but gradually use it as a base for exports to other regions, primarily Europe.
"Around 90 per cent of the new investments would be met through internal accruals while we may have to take loans for the remaining portion," Suzuki told reporters, a day after he, along with senior Nissan executives, met Indian government officials to seek their support and better infrastructure facilities.
Elaborating on the plans, he said Maruti's new car plant at Manesar, which is expected to begin production soon, will manufacture 100,000 units of the Swift as well as 200,000 units of a new 'small car' that the company is developing in collaboration with Nissan.
"Out of the production of the new small car, we will export 100,000 units ourselves while 50,000 would be exported by Nissan and the remaining 50,000 units sold in the domestic market by us," he said, adding that the plant will see overall investments of Rs 2,500 crore (Rs 25 billion).
Heavy Industries Minister Sontosh Mohan Dev told reporters on the sidelines of the SIAM summit that the companies had submitted a proposal to make the investments for a 350,000 unit capacity plant.
"The Suzuki-Nissan joint venture proposes to bring Foreign Direct Investment worth $1.5 billion for setting up a car plant at Manesar," Dev said.
The production from the plant would primarily be exported, he added. Top officials from Suzuki and Nissan had on Wednesday met senior ministers, including Dev, Railways Minister Lalu Prasad, Commerce Minister Kamal Nath, Finance Minister P Chidambaram and Road Transport and Highways Minister T R Balu, for seeking better infrastructure facilities like ports, roads and railways.