Isuzu Motors, the well acclaimed Japanese auto maker, has signed an agreement with the officials of Andra Pradesh government in order to establish its Greenfield production unit for light commercial vehicles and Sports Utility Vehicles (SUVs) in the state. Reportedly, this unit will start its operations by the end of 2015. The Deputy Managing Director of Isuzu, Shigeru Wakabayashi said that the project would demand an investment of Rs. 1,500 crore in a span of around 5-7 years, which will have an annual production capacity of around 1.2 lakh units. According to sources, one-fourth part of the total production will be exported by the auto company in other developing markets.
After signing the agreement with AP government, he said, “We plan to sell some 80,000 units in the domestic market, which is growing at a healthy pace on the back of steady economic growth, and export some 40,000 units.” Apart from India, the auto maker has it’s headquarter in Tokyo is presently operating in the world with production units in China and Thailand, which both have been shipping the models of Isuzu in more than 100 countries globally.
On the other hand, the Industries Secretary of AP, Pradeep Chandra is of a view that the auto maker will not sustain long in emerging as one of the major auto makers in the Indian auto space as the state does not have an adequate number of component manufactures. Rather, he is seeking the Isuzu unit to assist the state in redeveloping its suppliers' cluster. Chandra said, “While Toyota facility helped Karnataka attract some 150 auto component manufacturers, it was Nissan and Hyundai that facilitated Tamil Nadu build a network of over 250 auto part suppliers. We hope a similar success in establishing auto component manufacturers' cluster in AP.”
Speaking on the manufacturing of new products, Wakabayashi was quoted as saying, “We plan to produce pickup truck D-MAX and pick up derivative MU-7 from the AP facility and we are currently studying details pertaining stamping, welding, painting, assembling, engine manufacturing and transmission assembling.” Stating that Isuzu has forayed into the Indian auto market at a right time, he further said, “The Indian automobile industry is estimated to expand to some 10-15 million units from the current 3.6 million over the next 10 years.”
Interestingly, before 2015 when the auto maker’s plant will come as fully operational, Isuzu Motors is planning to route its vehicles as Completely Knocked Down (CKD) units in the country. Reportedly, the models will be imported from its Thailand unit and will be then assembled at one of the auto maker’s plant in the domestic market. Wakabayashi added, “We have been talking to some players in the market and Hindustan Motors per cent is one among them.” The senior officials of Isuzu said that the auto maker is importing Completely Built Units (CBUs) from its Thailand unit at present and has launched them in a number of Indian markets like Coimbatore and Hyderabad, in order to learn from the preference of Indian buyers.