Japan’s Suzuki moves deeper into India with global R&D unit

Suzuki, which already produces internal combustion engine cars in India, will start producing electric cars at its plant in 2025

Suzuki Motor Corp. will set up a global research and development company in India, its president said on Sunday, deepening its presence in what is expected to be an electric vehicle (EV) hub for the Japanese carmaker.

The new company, a wholly owned unit of Suzuki Japan, will strengthen the automaker’s competitiveness and R&D capabilities in India and other global markets, Toshihiro Suzuki said at an event in Gandhinagar, the capital of western Gujarat state.

“India has become one of the most important countries for the Suzuki Group,” he said, adding that Suzuki would continue to invest heavily in the country.

Suzuki, which already produces internal combustion engine cars in India for its local unit Maruti Suzuki and for export, will start manufacturing electric vehicles in 2025 at its Gujarat plant. It is also setting up a separate plant in the state from 2026 to produce batteries for electric vehicles.

The Japanese automaker said it will spend more than 104 billion rupees ($1.3 billion) on its electrification plans in India, making it one of Suzuki’s biggest investments in batteries and electric vehicles globally. It has already invested 650 billion rupees in the country.

“India plays a significant role as a global automotive manufacturing hub for the Suzuki Group,” Suzuki said.

Suzuki also has a joint venture with Japan’s Denso Corp. and Toshiba Corp. to manufacture lithium-ion batteries for hybrid cars for local use and export.

Suzuki is the majority owner of Maruti, which dominates the Indian car market with its small, inexpensive vehicles. But the company faces increasing competition as buyers move to larger cars such as sport utility vehicles (SUVs) and regulators demand safer and greener cars, driving up costs.

India is also pushing automakers to produce more electric cars by offering companies billions of dollars in incentives.

Indian Prime Minister Narendra Modi has said that electric vehicles are starting a “quiet revolution in the country” and that his government is acting to increase demand and supply of these clean vehicles.

“This quiet revolution is going to bring big changes,” he said at an event on Sunday that marked 40 years of Suzuki’s partnership with Maruti.

Modi laid the foundation stones of two major projects – Suzuki’s electric vehicle battery plant in Gujarat and Maruti’s car plant in the northern state of Haryana.

Electrification is seen as a challenge for Maruti, which wants New Delhi to encourage all cleaner technologies, including hybrids and ethanol, and not just electric vehicles, which it expects to launch in 2025.