TOKYO -- Suzuki Motor Corp. plans to spend 15 billion rupees ($311.9 million) on an r&d center to develop passenger cars in India, a profitable market that has helped the Japanese automaker offset plunging sales and losses in the United States.
The tech center will be built in the city of Rohtak, near Delhi, in conjunction with Suzukis local unit, Maruti Suzuki India Ltd. The center will be completed in 2015, the parent company said today.
The goal is to strengthen Suzukis position in a country where it consistently generates profits. Maruti Suzuki vehicles account for about half the passenger cars sold in India.
Success in India has helped Suzuki absorb losses in North America and other markets. But upstarts such as Hyundai Motor Co., Nissan Motor Co. and Tata Motors, which has rolled out the inexpensive Nano minicar, are challenging Suzukis dominance in the subcontinent.
To keep this market share, we need to expand, said Suzuki spokesman Takuma Mizuyoshi. The automaker aims to do that by better tailoring its cars to the expanding Indian market.
In July, Maruti Suzukis sales rose 33.4 percent from a year earlier to 78,074 vehicles. In the April-June quarter, net income grew 25.3 percent. By contrast, Suzukis light-vehicle sales in the United States tumbled 56.7 percent last month to 3,507. The only brands performing worse were Hummer and Saturn.
In the April-June period, Suzuki posted a North American operating loss.
The Rohtak r&d center will have multiple test tracks, a crash test operation, emission labs, a wind tunnel, and a durability testing and evaluation center for components. Japans Nikkei business daily said Suzuki is the first foreign carmaker to build such a large r&d center in India.
Maruti Suzuki plans to design and develop a car on its own and build it in India by 2012. The Japanese parent company wants the operation to become its foreign r&d hub for small cars.
Besides building cars for India, Maruti Suzuki exports the A-star small car to Germany, Britain, France and other European countries.