Govt opposes Suzuki venture

NEW DELHI, July 22: The government is opposed to a joint venture between Suzuki and Maruti for a foundry to manufacture castings for engine...

NEW DELHI, July 22: The government is opposed to a joint venture between Suzuki and Maruti for a foundry to manufacture castings for engines and gear boxes. Speaking to The Indian Express, Union industry minister Murasoli Maran said a joint venture only for castings where Suzuki will hold 90 per cent equity is not acceptable to the government.

Suzuki wants to set up a foundry at a cost of Rs 500 crore in Uttar Pradesh. Aditya Bhargava, a Suzuki employee who is Maruti managing director R C Bhargava’s son, has prepared the blueprint for the project. "The government is not in the business of going out of its way to help Suzuki," the minister said.

A foundry manufactures castings, which are metal shells to hold engines and gear shafts. As aluminium castings are manufactured within the country the government is of the opinion that there is no urgency to set up a foundry which will enable Suzuki to have a captive customer in Maruti.The government feels that Suzuki should honour its 1992 commitment of parting with its gear technology to Maruti. Five years ago an agreement had been signed between Maruti and Suzuki that the latter would transfer its gear technology to Maruti. The government is peeved that this has not been done as yet.

When Maruti is making a royalty of about Rs 1,200 for every Maruti 800 to Suzuki, the government is of the opinion that the Japanese manufacturer should part with its gear technology.

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