The country’s largest passenger car manufacturer Maruti Suzuki India Ltd (MSIL) is all set to follow Tata Motors, Mahindra & Mahindra and Hero MotoCorp to Africa, by setting up a manufacturing facility there.
Company sources told Business Line that a few officials have been regularly visiting the country for feasibility studies.
“It is a long-term plan and (it) will take at least 3-4 years to come up. Decisions will be taken after the feasibility studies,” an official said on conditions of anonymity.
The company is expanding its plants in Gujarat and Manesar. This is expected to take two years. The decision to set up the facility in Africa may come only after these projects come on stream, the sources indicated.
A MSIL official said that Africa was one of the largest export markets for the company, so it made sense to set up a manufacturing facility there. Also, with the company planning to launch its light commercial vehicle (LCV) in the next two years, it may start with the production of LCVs first in South Africa.
Sources said the facility in South Africa would bear the Suzuki Motor Corporation (the parent company) flag, like in Indonesia. At present, the parent company does not have a manufacturing or an assembly plant in Africa, but cars made by them are sold there. However, when asked, R.C. Bhargava, Chairman, MSIL, said that the company is not planning anything in Africa as of now. “We are not thinking of anything as such. We hardly have exposure to South Africa,” he told this newspaper.
The company is doing feasibility studies for an assembly plant in Sri Lanka, Mayank Pareek, Chief Operating Officer – Marketing and Sales, MSIL, said recently According to analysts, it will make sense for the company to start a plant in Africa, since it is a big market now and many Indian players have also set foot there.
“Maruti Suzuki has a big chance to win the African market as car sales are growing. We see the company definitely coming up with a plant in future,” Puneet Gupta, Principal Analyst at India Automotive, HIS, said.
Tata Motors and M&M already have set up assembly plants there and sell both passenger as well commercial vehicles. India’s largest two-wheeler manufacturer Hero MotoCorp had, last month, announced plans for an assembly plant in Kenya.
MSIL sold a total of 83,299 cars in July, up 1.3 per cent compared with 82,234 units in same month last year. The company exported 8,154 units during the month, down 27.3 per cent against the 11,210 units in July 2012.