Maruti Suzuki to set up Production facility in South Africa?

Maruti Suzuki, India's largest car manufacturer is planning to set up a manufacturing facility in South Africa. Tata Motors and Mahindra & Mahindra have already established their production base in the the African continent.

The company officials have been regularly visiting South Africa for feasibility studies. “It is a long-term plan and (it) will take at least 3-4 years to come up. Decisions will be taken after the feasibility studies,” an official told Business Line on conditions of anonymity.

As of now,  the company is working on the expansion of its Gujarat and Manesar plants, which is expected to take around 2 more years to get finished. The final decision to set up the production facility in the Africa might only come after these two projects come in functioning. Africa has been one of the largest export markets for the Maruti Suzuki India, and it will be sensible to set up a manufacturing base there. Moreover, the company is also planning to launch its Light Commercial Vehicle (LCV) by 2015, and it is expected that MSI may start the development of LCVs first in South Africa.

Similar to Indonesia, the production facility in South Africa would bear the Suzuki Motor Corporation badge. Currently, the company does not have any assembly or manufacturing unit in Africa, but they export their cars there. According to Mayank Pareek, Chief Operating Officer Marketing and Sales, MSIL, the firm is doing feasibility studies for an assembly plant in Sri Lanka. He further mentioned that analysts believe that it will make sense for the company to set up a manufacturing base in Africa, as it has become a big market and many homegrown auto-majors have already established their production base there.

“Maruti Suzuki has a big chance to win the African market as car sales are growing. We see the company definitely coming up with a plant in future,” Puneet Gupta, Principal Analyst at India Automotive, HIS, said.

Source : Business Line