In an unorthodox move among Japanese automakers, Suzuki positions India as its primary EV hub, targeting an electric future in both domestic and global markets by 2025
Suzuki Motor, a leading global car manufacturer, is steering its ambitions towards an electric future. Reports suggest that the automotive giant is keen to transform its operations in India into an electric vehicle (EV) export powerhouse. The company's goal? To ship out these Indian-made EVs to Japan as soon as 2025, and subsequently to Europe where EV fervour is reaching new highs.
The decision to plant its EV roots in India is a significant pivot from the traditional Japanese manufacturing playbook. Traditionally, Japanese automakers like Toyota and Nissan have initiated their technological advancements domestically, harnessing the vast R&D resources available. They then replicate these production lines overseas. Yet, Suzuki is taking the road less travelled by initiating production in India—a bold move, indicative of the country's booming potential in both domestic demand and reduced manufacturing costs.
Central to this ambitious move is Maruti Suzuki, the company's Indian subsidiary and a juggernaut in the subcontinent's automotive scene. With a big 40% slice of India's passenger car pie, the company's deep-rooted presence makes it a force to reckon with.
Gujarat, located in western India, will see a new EV production line come to life by Autumn 2024. As Suzuki fortifies its foothold in India, it is gearing up to challenge its Chinese counterparts. With a keen eye on both development speed and cost-efficiency, Suzuki's ultimate game plan is to launch competitively priced EVs, targeting the global market with prices ranging between $20,000 to $26,000.
While Japan's weakening yen has given its exports an edge, India's allure as a cost-effective manufacturing hub cannot be understated. A stark difference in production costs, with India clocking in at 20% less than Japan, underpins this strategic move.
But it's not just about cost. The battle to conquer Europe's burgeoning EV market is heating up, with Suzuki's European strategy possibly having a dual approach. Alongside exporting its own branded EVs, Suzuki might supply EVs to Toyota for European distribution under the Toyota brand, bolstering their partnership.
Back home, India's EV trajectory looks promising. A staggering six-fold surge in EV sales has been recorded in 2023's first half, a mere hint at the untapped potential. The Indian government's vision is clear: electric cars should make up 30% of new sales by 2030.
However, Suzuki isn't without competition. Tata Motors leads the EV charge in India, boasting a projected market share of 70% this year. Following closely are Mahindra and Mahindra and MG Motor, backed by China's SAIC Motor.
China's formidable growth in the global EV arena is palpable, having multiplied its EV export share by eight in just half a decade. But Suzuki isn't backing down. As they ramp up their gasoline vehicle exports to Africa to fend off Chinese competitors, they're replicating this strategy for EVs.
As for the Japanese home ground, Suzuki has plans brewing. Come 2026, they'll utilise the knowledge gained in India to produce electric kei cars, the beloved lightweight minicars famed for their pocket-friendly nature and ease of navigation.
This unfolding narrative underscores a pivotal moment in the automotive world, as industry stalwarts like Suzuki place their bets on the future of transport. Only time will tell where these electrified roads lead.