Japanese major Nissan Motor Company’s decision to not build a manufacturing facility in India with Suzuki Motor Corporation may affect Maruti’s overall passenger car exports.
On his recent visit to India, Suzuki chairman Osamu Suzuki had said that his company would export 40% of total production — or four lakh vehicles — from India by 2010. But hours after the declaration by Carlos Ghosn, president and chief executive of Nissan, in Paris on Thursday about the change in plan, Maruti Udyog managing director Jagdish Khattar told DNA Money Suzuki’s export target from India will now be only 2 lakh units by 2010.
Which also means the production will come down from 10 lakh vehicles to 8 lakh vehicles.
“We had said that from the second plant Maruti is putting up at Manesar, we will export 1.5 lakh cars under the Suzuki brand name and another 50,000 under the Nissan badge. This arrangement remains.
The remaining two lakh cars that were to be exported by Suzuki from India would have been sourced from the new plant of Nissan’s,” Khattar said.
Nissan’s withdrawal comes within days of reports that the government has denied SEZ status to Suzuki’s Manesar facility — a request Osamu Suzuki had made during his recent visit, citing mega export targets from here. Suzuki had also sought corporate tax exemption for ten years, duty exemption on imported components and raw materials, according to industry sources.
When asked about the Government’s denial to grant the SEZ status, Khattar said: “We never sought this status so where is the question of Government rejecting it?”
But does Nissan’s retreat affect Suzuki’s overall investment plans for India?
Khattar says investments by the Japanese parent will come in as planned. This means the additional Rs 3,000 crore announced by the chairman will anyway find its way to the Indian subsidiary.
The Secretary General of SIAM, Dilip Chenoy, welcomed Nissan’s decision to source from the Mahindra Renault plant, saying a large plant which can manufacture multiple cars will lead to economies of scale and an overall cost advantage
On his recent visit to India, Suzuki chairman Osamu Suzuki had said that his company would export 40% of total production — or four lakh vehicles — from India by 2010. But hours after the declaration by Carlos Ghosn, president and chief executive of Nissan, in Paris on Thursday about the change in plan, Maruti Udyog managing director Jagdish Khattar told DNA Money Suzuki’s export target from India will now be only 2 lakh units by 2010.
Which also means the production will come down from 10 lakh vehicles to 8 lakh vehicles.
“We had said that from the second plant Maruti is putting up at Manesar, we will export 1.5 lakh cars under the Suzuki brand name and another 50,000 under the Nissan badge. This arrangement remains.
The remaining two lakh cars that were to be exported by Suzuki from India would have been sourced from the new plant of Nissan’s,” Khattar said.
Nissan’s withdrawal comes within days of reports that the government has denied SEZ status to Suzuki’s Manesar facility — a request Osamu Suzuki had made during his recent visit, citing mega export targets from here. Suzuki had also sought corporate tax exemption for ten years, duty exemption on imported components and raw materials, according to industry sources.
When asked about the Government’s denial to grant the SEZ status, Khattar said: “We never sought this status so where is the question of Government rejecting it?”
But does Nissan’s retreat affect Suzuki’s overall investment plans for India?
Khattar says investments by the Japanese parent will come in as planned. This means the additional Rs 3,000 crore announced by the chairman will anyway find its way to the Indian subsidiary.
The Secretary General of SIAM, Dilip Chenoy, welcomed Nissan’s decision to source from the Mahindra Renault plant, saying a large plant which can manufacture multiple cars will lead to economies of scale and an overall cost advantage
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