Boost small car R&D, Suzuki tells Maruti...

Betting big on the excise benefits available in India on smaller car, Suzuki Motor Corporation (SMC) of Japan has asked its Indian subsidiary Maruti Suzuki India Ltd (MSIL) to enhance the level of research and development (R&D) for small car engines from 30% now to 90% in the near future.

Addressing the shareholders at the company’s 27th annual general meeting, Maruti Suzuki India chairman RC Bhargava said that SMC chairman Osamu Suzuki has asked the MSI board to strengthen R&D on small engines of up to 1,200cc. “Petrol engines below 1,200cc get excise benefit from the government of India and currently 30% of R&D for these engines takes place in India. Instead, the Suzuki chief now wants the R&D on lower capacity engines in India to be scaled up to 90%,” Bhargava said. “It is important that Maruti develops these engines in India with help from Japan,” he added.

In line with its Automotive Mission 2016, the Centre had reduced the excise duty on smaller cars in the last Budget from 16% to 12% to help India develop as a hub for smaller cars.

The SMC chairman is also of the view that going forward there would be spurt in sales of small cars while bigger cars will see a drop in demand as oil prices continue to be high. “Emphasizing on the fact that there would be no respite from high oil and high commodity prices in the near future, Suzuki Motor Corporation feels that there is a need to develop more fuel efficient and less emission cars such as multi-fuel, electric and hybrid cars,” Bhargava added.

Suzuki Motor Corporation has already announced its Rs 9,000 crore investment plan in India that includes scaling up the production capacity at its Manesar plant to 3,00,000 units, increasing capacity at the company’s diesel plant and supplier’s park at Manesar as well as setting up an engine plant in Gurgaon to manufacture the company’s next generation K-Series engine.

The company plans to re-enter the European market with the launch of its global strategic model A-star in October this year followed by Splash next year in the A2 segment. While, both these models would be powered by the company’s upcoming K-Series engine, over 2,00,000 units of A-Star would be exported to Europe by 2010-11.

Maruti Suzuki India (formerly Maruti Udyog Ltd), is a subsidiary of Suzuki Motor Corporation of Japan with the parent company having a majority 54.21% stake in the company.