India’s largest carmaker Maruti Suzuki has decided to merge with Suzuki Powertrain India (SPIL) which supplies diesel engines for its range of car models in India. SPIL is a subsidiary of the Japanese company Suzuki Motor Corp (SMC) which is also the parent company of Maruti Suzuki India. While Suzuki holds 70 percent of stake in SPIL, the remaining 30 percent stake is held by Maruti Suzuki.
As an outcome of the merger, the management of Maruti Suzuki’s entire diesel engine capacity will become centralized, thus enabling centralized sourcing, localization, planning and manufacturing flexibility. Moreover, Maruti Suzuki plans to improve cost reduction and implement efficient control and monitoring.
The merger will be effective from April 2012 including the merger of accounts after the requisite regulatory approvals and legal requirements have been fulfilled. The company expects the merger process to be completed by December 2012.