Amid 2-wheeler sales slowdown, Suzuki holds investment

New Delhi: Suzuki Motorcycle India Pvt Ltd has decided to hold back its planned investments on capacity enhancement due to the ongoing slowdown in two-wheeler sales and expectation of a hit in the market by the transition to stricter BS-VI emission norm from BS-IV in April 2020, according to a senior company official.

The company, which is the only two-wheeler maker to post double-digit growth so far this fiscal, also said uncertainty created over electrification of two-wheelers had also played a role in parent Suzuki Motor Corporation to adopt a wait and watch strategy before finalizing on setting up a new manufacturing plant in India.

“The capacity enhancement is on the cards but it is not immediate. We would need a new facility but it would all depend on how the market responds to the BS-IV to BS-VI migration. That is very crucial and we are watching out for that,” Suzuki Motorcycle India Pvt Ltd (SMIPL) Vice-President (sales, marketing and aftersales) Devashish Handa told PTI. SMIPL currently has a manufacturing plant in Gurugram with an annual capacity of 10 lakh units. The company expects to sell around 8 lakh units in the domestic market and export one lakh units this fiscal, he added.

“The expansion would definitely be there. It would have been earlier had the downturn not happened,” Handa said adding, it would also depend on how the whole electrification of two-wheelers pan out despite the recent government clarification over co-existence of internal combustion engine and electric vehicles (EVs). “However, things like timelines and infrastructure (for EVs) are still to be notified or spelled out. We would like to see that (happen). A lot would depend on these two factors (BS-VI migration and electrification),” Handa said.

When asked if the company has at least identified a location and investment for the new plant, he said, “It is early to comment because it would not necessarily be to do with just the domestic market but also to do with parent Suzuki Motor Corporation’s (SMC) plans on their global operations, which may have a bearing on what capacity and what nature of capacity. Along with EVs, you have multiple factors that make it difficult to comment right now.” Commenting on the challenges of BS-VI transition, he said it may “have an impact similar to what the insurance regulation had in September last year”.

Agency