Suzuki’s plant launch in India delayed until 2017

Suzuki’s plant launch in India delayed until 2017

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Japanese auto giant Suzuki Motors stated on January 28, 2014 that it will delay the opening of its new car plant in India by one year, to 2017. The recent decision has been made by the company due to a severe market slowdown in the country.

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The local unit of Maruti Suzuki was scheduled to set up the new factory in the country’s western Gujarat state in 2016, however, the company announced on Tuesday, January 28, 2014 that a new fully-owned unit – Suzuki Motor Gujarat Private Ltd – will build the plant with an investment of 50 billion yen. The new unit was planned by the company in an attempt to reduce the cost burden on Maruti Suzuki.

The company was hit by a serious labor unrest in 2012 and the subsidiary dealt with a sharp market slowdown. The car sales in India fell almost ten percent year-on-year in 2013, in the first decline for 11 years. These figures were noted by the Society of Indian Automobile Manufacturers, amid higher fuel costs and interest rates and slow economic growth.

A spokesperson for Suzuki said, “We have reviewed the plan following the recent tough market situation in India”. The spokesperson went on to say that the new plant will begin production in 2017, with an initial capacity of 100,000 vehicles a year.

Photo Credits: Indian Drives