Suzuki Motor Corporation (SMC), the parent company of India’s largest car manufacturer Maruti Suzuki is planning to make India its production base for small cars. The automaker’s decision to shift its small car hub to India will be implemented along with the setting up of Maruti Suzuki’s new manufacturing facility in Gujarat.
The Japanese automaker plans to make India its export hub for its entire range of small car models. After the setting up of the hub in India, the carmaker’s current export hub at Hamamatsu (Japan) will cater exclusively to its domestic market, i.e. the Japanese market and the export activities will be operated from India. The company reportedly exported about 24 percent of its total annual production in the fiscal 2011-12.
According to Mr. RC Bhargava Chairman Maruti Suzuki India, the parent company plans to shift the export hub to India because of the appreciation of the Yen making the exports noncompetitive. He added that since the carmaker majorly produces small cars and has a majority market share in India, including a large component vendor base, India as an export hub makes more sense.
The low labor costs in India and the proximity of ports in Gujarat also tip the scale in favor of the decision.