Suzuki,VW may fix India plans by 2011

The global car makers' plans may include joint production and vehicle design.

Two leading global car makers — Suzuki and Volkswagen — are likely to announce India-specific plans that may include joint production and vehicle design by early next year.

Speaking to analysts in a conference call,Suzuki’s subsidiary,Maruti Suzuki India (MSI)’s Managing Director and CEO Shinzo Nakanishi said both the companies are currently discussing various options.

“Some time end of this year or beginning of next year,they (Suzuki and Volkswagen) may announce some projects,” he said when asked about the progress of the talks between the two global car majors on any India-specific project.

He,however,said nothing can be predicted till the negotiations are complete.

“We have got no definite information so far,” he added.

Volkswagen (VW) had last year picked up 19.9 per cent stake in Suzuki Motor Corp (SMC) for USD 2.5 billion,following which the partners have been exploring possibilities of joint production and vehicle design.

Early this month,Volkswagen AG Chairman Martin Winterkorn had said that the German firm is likely to finalise a decision by the first half of 2011 on the development of an India-specific small car with the Japanese firm.

Story continues below this ad

“Small car,specifically for India,is one of the areas that we are discussing with Suzuki… This decision for India will probably be taken by spring 2011,” he had said.

Besides,another discussion point between SMC and VW is about bringing in advanced diesel technology into India from the German carmaker’s portfolio as MSI lacks in that front.

Winterkorn had said that VW and SMC are talking to share technologies to develop diesel engines,which in future may come to the Indian market also.

When asked whether MSI has any plans to introduce more diesel variants in addition to the 1.3 litre one,Nakanishi said: “We do not have plans to introduce other types of diesel engines. Right now,we do not have other source of diesel engines.”

Story continues below this ad

MSI offers diesel variants in hatchbacks Swift and Ritz and in entry-level sedan DZiRE. About 70 per cent of the total Swift and DZiRE sales come from diesel variants,while 55 per cent of Ritz are sold in the diesel option.

Earlier in May this year,top officials of MSI and VW India met to explore synergies in joint production,including contract manufacturing,and vehicle design.

While SMC is keen to get VW’s technology,the German firm is interested in MSI’s expertise in high volume production at a very competitive cost and efficiency.

A new entrant in India,VW is yet to gain firm ground. In contrast,MSI is the largest brand with just less than 50 per cent share in the 15 lakh units Indian car market.