Japan’s Suzuki Motor will invest 700 billion rupees ($8 billion) in India over the next five to six years as the automaker begins production of its first electric vehicle, its chairman said on Tuesday.
Through its majority-owned unit Maruti Suzuki, the company already manufactures 17 models in India for export to about 100 countries, including Japan. The start of electric vehicle production marks a shift in strategy, with India becoming the global hub for Suzuki’s EV output.
Shares of Maruti Suzuki rose 2.6% to a record high following the announcement, which coincided with the start of commercial production of the mid-sized “e Vitara” SUV at the automaker’s Gujarat facility in Hansalpur Becharaji. The vehicle is expected to compete with Hyundai’s Creta and Mahindra’s XEV 9e.
Maruti Suzuki chairman R.C. Bhargava said the company plans to export between 50,000 and 100,000 units of the e Vitara annually, though no timeline has been set for an Indian launch. “There is not yet a timeline for a launch in India,” Bhargava said, noting that the high cost of batteries remains a challenge in the price-sensitive local market where Suzuki controls about 40% share.
Suzuki Motor scaled back its electric vehicle plans earlier this year due to intensifying competition and a global slowdown in demand, even as India’s EV sales continue to grow faster than the overall car market. Electric models account for around 4.5% of total car sales in the current fiscal year, while the government maintains a target of 30% by 2030.
Suzuki Motor chairman and president Toshihiro Suzuki said the Gujarat plant is expected to become one of the world’s largest automobile manufacturing hubs, with a planned capacity of 1 million units. Prime Minister Narendra Modi, who attended the inauguration, called the launch a “big leap” towards the country’s ‘Make in India’ initiative and urged consumers to prioritize locally made products.