Maruti Suzuki setting up a production facility in South Africa

Developing nation all around the world have turned into blooming business hubs over the past few years. They are thus attracting a lot of foreign investors and business firms who are desirous of capturing the swiftly growing economy here. India is one such nation. Over the years so many international firms have ventured in the country. Looking at the autoworld, all the big names are having their facilities in India. Be it VW, Honda, Hyundai, Suzuki etc, they all have their own production houses here. When others are coming in, Indian car makers are trying to move out. The African nations are proving to be a great market for Indian manufactured cars. The latest one who is trying to step into African continent is Maruti Suzuki.

The biggest automobile manufacturer in the country, Maruti Suzuki India Limited, is trying to have a manufacturing unit in South Africa. Maruti Suzuki has a huge line up consisting of every kind of vehicle. They have cars which are light and yet sturdy; cost effective and yet sophisticated and fuel efficient. They require very little cost of maintenance as well. This is the greatest reason why Maruti Suzuki is such a hit with the Indian masses. These cars are perfect for the developing nations.

Over the years, Africa has become one of the largest export markets for this Indian subsidiary. It is not at all surprising that they are wishing to have a plant in the country itself. Having a production plant would allow localized production of their models which will allow the company to offer their cars at more competitive prices.

Maruti Suzuki setting up a production facility in South Africa
The company heads have been seen travelling to South Africa multiple times to analyse the region and its prospects. An official said that β€œIt 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.”

The company as if now does not have any facility in Africa but it sure has a huge market. A principal analyst at Indian Automotive, Puneet Gupta, said that β€œMaruti 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.” If this happens, then the parent company in India will export its models as Completely Knocked Down kits (CKDs) instead of CBUs which is the current scenario. The CKDs will be assembled at the localized plant in South Africa and will be distributed within the country. This will drop the car price significantly which can add to its market share in Africa.

Presently the company is busy with expanding its manufacturing plants in Gujarat and Manesar which will take around 2 more years for completion. Therefore, any decision regarding the construction of a manufacturing facility in South Africa will come only after these plants become fully operational. Apart from setting up its own facility, Maruti is also planning to launch its LCV (Light Commercial Vehicle) in 2015. It is expected that the company will begin working on this LCV in Africa first.

The production facility in South Africa will be named after the parent company based in Japan, Suzuki Motor Corporation. The chief operating officer of marketing and sales, Mayank Puneet said that the company is, at present, carrying on feasibility studies for a new plant in Sri Lanka.

While Maruti is still thinking on stepping into South Africa, many Indian giants have already settled in the country. Mahindra and Mahindra, Tata Motors, Hero MotoCorp and recently TVS Motors have already set up their facilities in the country.

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