Suzuki increases production capacity in India
- Suzuki has completed the construction of its new plant in India, located in Gujarat, with a capacity of 250,000 vehicles per year. This new site will bring Suzuki's total capacity in Gujarat to 750,000 units per year. The carmaker has two other plants in this state, with a capacity of 250,000 units per year each. In total, with this third plant in Gujarat, Suzuki's production capacity in India will increase from 2 million to 2.25 million units per year, which he believes will meet the demand of the domestic market, but also of the foreign markets.
- Indeed, despite the Indian market decline recorded in 2019 and 2020, the Japanese carmaker believes in its strong potential and in a rapid recovery of sales in the country. The peak of the Indian market was reached in 2018, with a volume of 4.4 million registrations (PCs + LUVs) and Suzuki expects this level to be reached again in the next two years. Given that Suzuki's market share in India is around 50%, the carmaker calculated that to represent 50% of a market equal to 4.4 million units, it needed a production capacity 2.2 million vehicles per year.
- According to Inovev, Suzuki's bet is quite risky as there is no indication that the Indian market will reach a new high in 2022 or 2023. There is also nothing to say that Suzuki will achieve a 50% market share in this country. In 2018, in a market of 4.4 million vehicles, Suzuki produced only 1.875 million. Finally, Suzuki is no longer in tune with global demand (SUVs, hybrid and electric cars) explaining the difficulties of the parent company. Its exports are therefore likely to suffer.
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