Suzuki Motor Corporation has promised to invest ₹10,440 crore in India to bolster manufacturing capacity of electric vehicles and batteries in the country. The investments are part of the memorandum of understanding (MoU) signed between the Gujarat government and the Japanese automobile major.
“Suzuki Motor Corporation (SMC) signed MoU with the state of Gujarat, India to invest approximately 150 billion yen (approximately ₹10,440 crore) for local manufacturing of electric vehicles (BEV) and BEV batteries,” the Japanese car maker said in a statement.
This fresh investment to boost the electric vehicle manufacturing in the country includes ₹3,100 crore for increasing the electric vehicle manufacturing capacity at Suzuki Motor Gujarat (SMG) facility. The company will invest ₹7,300 crore to construct an EV battery manufacturing unit adjacent to the SMG facility. These two investments will be completed by 2025 and 2026, respectively.
The facilities are likely to underpin India’s plans to promote electric mobility in the country and move away from fossil fuels in transportation. The government is already putting its weight behind electric vehicles with the FAME II scheme and the battery-swapping policy, which was announced in the Union Budget. The production-linked incentive scheme for the auto sector, for which companies were finalised last week, is also expected to help on this front.
Suzuki will also pump in ₹45 crore to set up a vehicle recycling plant that will be set up by Maruti Suzuki Toyotsu India Private Limited (MSTI), a joint venture between Maruti Suzuki and Japan’s Toyota Tsusho Group. This facility will be brought up by 2025. The two companies had announced a joint venture in November 2019 for a vehicle dismantling and recycling facility in Noida, Uttar Pradesh.
The MOU was signed on March 19 at the India-Japan Economic Forum held in New Delhi in the presence of Indian prime minister Narendra Modi and his Japanese counterpart Fumio Kishida. Kenichi Ayukawa, managing director and CEO of Maruti Suzuki India Limited, was also in attendance.
During the meeting, Japan promised an overall investment of ₹3.2 lakh crore (5 trillion yen) in the coming five years.
“Suzuki's future mission is to achieve carbon neutrality with small cars,” said Toshihiro Suzuki, representative director and president, Suzuki Motor Corporation. “We will continue active investment in India to realize Self-reliant India (Atma-nirbhar Bharat).”
The agreement marks Maruti Suzuki's first steps into electric mobility. The biggest car manufacturer in India had shelved its plans to launch electric vehicles in 2020 on the back of lack of infrastructure and government support. As of now, there are no changes in Maruti Suzuki’s current timeline for launching electric vehicles in India, which the company had set as 2025.
Spurred by the EV push from its parent company, Maruti Suzuki shares rallied on Monday, rising 197.40 points, or 2.57%, to ₹7,887.60.