Suzuki feeling the heat...

[directinjection]

While yesterday's announcement regarding Jagdish Khattar's departure from Maruti Suzuki has made news (we already have a thread on that subject) there's another important announcement that indicates a major shift in the way Suzuki views Maruti and India.

While announcing Mr Khattar's retirement yesterday, Mr Osamu Suzuki, Chairman of Suzuki Motor Co. admitted that Suzuki hasn't done enough in India. He said, "Foreign car makers are increasing their presence in India. Maruti Suzuki cannot afford to work at the present pace."

He simultaneously anounced that Maruti Suzuki Ltd. (MSL) will be investing $ 1.8 billion to set up a 500-acre research and development unit at Manesar, and also step up spending on marketing and production. The $ 1.8 billion expenditure is over and above the investment of Rs 9,000 crore till 2010 that the company had earlier announced which will enable it to attain 1 million production by 2010-11.

I think this a very important development for the Indian auto industry and one that was long overdue. MSL has been justly criticised all these years for using screwdriver technology and even Govt. of India had a tiff with Suzuki for not parting with technology for gearboxes that had to be imported from Japan even for M800!

$ 1.8 billion is a lot of money. Once MSL has a full-fledged R&D set up in India, its future products will be tailormade for Indian conditions and not be mere adaptations of something that was designed keeping Japan, not India, in mind. Of course, the Indian R&D set up will also be used for Suzuki's global operations and that'll do our engineers a lot of good!

Tata's ERC has been the country's sole world-class auto R&D centre for long and it's very heartening to see the way things are changing.

Here's the link to the report in Hindustan Times:

Khattar bows out at Maruti- Hindustan Times

[Technocrat]

I am not really sure if Khattar levaing MSIL is a good news. I mean all the good things to Maruti happend in his tenure. I just hope the next guy is atleast as good as him if not better.

[phamilyman]

The reason for gearboxes being made in Japan is probably nothing else besides creating jobs in japan, and repatriating cash via transfer pricing and nothing else (or similarly introducing baleno )

I'm sure gearboxes as bad as m800 can be made in India as well!

[mohit]

I'm sure gearboxes as bad as m800 can be made in India as well!

FYI Toyota makes Landcruiser (the ones sold abroad) gearboxes in India.

[directinjection]

Originally Posted by mohit

FYI Toyota makes Landcruiser (the ones sold abroad) gearboxes in India.

Toyota's Indian plant is the sole source of gearboxes for the Innova family of vehicles worldwide. Not sure about the Landcruiser. Can you provide some reliable source?

Only 3 replies? Come on guys, how often does someone set up a $ 1.8 billion R&D unit in India?

[anandpadhye]

Pardon me but I want to know -
Is Tata's ERC called "world class"?
Who calls it that?

The PMT and BEST bus drivers have to stand on the clutch or use a heavy stone to keep the clutch pressed so they can manuover in Pune/Mumbai traffic.


Suzuki, Honda and Toyota getting thing done in India is definately good...but please don't mention Tatas and Mahindras in the same post.

[directinjection]

Originally Posted by anandpadhye

Pardon me but I want to know -
Is Tata's ERC called "world class"?
Who calls it that?

The term was used in the Indian context of course. How many existing auto R&D establishments in India match the ERC?

Originally Posted by anandpadhye

The PMT and BEST bus drivers have to stand on the clutch or use a heavy stone to keep the clutch pressed so they can manuover in Pune/Mumbai traffic.

How many PSU bus drivers follow the manual? With lifetime job security assured, they treat their vehicles like enemies. One of the first things they do is to remove the speedo cable so that they can indulge in all sorts of corrupt practices. Many don't even bother to press the clutch while changing gears, irrespective of the make of the bus.

Originally Posted by anandpadhye

Suzuki, Honda and Toyota getting thing done in India is definately good...but please don't mention Tatas and Mahindras in the same post.

Why not if they have exhibited greater commitment to India-specific R&D?
Is it pardonable that someone makes 600,000 cars in India every year, takes away millions in fees, royalties and dividend but doesn't design a nut here?

[theMAG]

Originally Posted by directinjection

... how often does someone set up a $ 1.8 billion R&D unit in India?

If Suzuki can confirm beyond doubt that a majority of that $ 1.8 billion is intended for utilizing Indian R&D talent for Indian future cars and is a completely autonomous facility, then this is a cause for genuine celebration.

However, if this R&D is intended for applications not related to Indian automobiles or for performing some background hand-me-down jobs from their other R&D centers , and has been primarily setup to utilize the cheaper salary here, then I'd rather that Suzuki opens this shop elsewhere.

[amit]

Isn't the thread title misleading? The launch of cars like the Swift and SX4 and news of upcoming Splash, new Esteem (Swfit Sedan) and the probable D segmenter (Kizashi concept) plus the new factory for producing multi-jet diesel engines are proof enough that Suzuki started taking India seriously a while back.

I don't think the departure of Jagdish Khattar will make any difference. Maruti-Suzuki have realised that the only way they can continue to be market leaders is by providing latest cars from their international model range in India. After all, India is their biggest market.

[directinjection]

Originally Posted by amit

The launch of cars like the Swift and SX4 and news of upcoming Splash, new Esteem (Swfit Sedan) and the probable D segmenter (Kizashi concept) plus the new factory for producing multi-jet diesel engines are proof enough that Suzuki started taking India seriously a while back.

True, but the thread is not about Suzuki launching their latest international models in India. It's about Suzuki designing and developing cars in India, something it hasn't done so far.

[anandpadhye]

Absolutely.
And ironically, Maruti Suzuki is the first company to lauch the Multijet in India while GM and Fiat are still selling crap here (in spite of the fact that all 3 of them own the rights to Multijet)...

[VBV]

I would agree with Amith. Suzuki has not only introduced new models in India, but also invested huge amounts in India. This would be a nice title about 4 years back. Now I would call Suzuki cars as more of an Indian multinational than Japanese MNC. IIRC, Suzuki sells more car in India than in Japan. MSN INDIA - Maruti beats Suzuki Japan in sales

Btw the stock market did not treat the departure as insignificant. Maruti stocks were down yesterday and it was attributed to the retirement of MR Khattar.


VBV

[VBV]

Originally Posted by directinjection

True, but the thread is not about Suzuki launching their latest international models in India. It's about Suzuki designing and developing cars in India, something it hasn't done so far.

So which competition (apart from Tatas) are designing and developing cars in India? Is there heat coming from the competition that Suzuki feels?

VBV

[vivek_pinkoo]

Originally Posted by directinjection

True, but the thread is not about Suzuki launching their latest international models in India. It's about Suzuki designing and developing cars in India, something it hasn't done so far.

Does not make any difference as long as their car suite Indian condition and Indians (as they have been till date), regardless of where their R&D is located.

[Zensible]

Originally Posted by amit

The launch of cars like the Swift and SX4 and news of upcoming Splash, new Esteem (Swfit Sedan) and the probable D segmenter (Kizashi concept) plus the new factory for producing multi-jet diesel engines are proof enough that Suzuki started taking India seriously a while back.

Let's hope the new products that they have in the pipeline cab compete with the "value-for-money" strategy of Hyundai. Hyundai has upped their game tremendously in the past few years, especially with their new Sonata.

In the United States, by far the toughest market, they have established their quality credentials. Their cars and SUVs are uttered in the same breath as Honda and Toyota and their latest SUV is compared to the Lexus RX350 but the Auto Media here.

I feel Suzuki culture was influenced by the License-Raj mindset since it's inception. How else can you explain their lack of upgrades on all their models till Hyundai came to town?
Khattar leaving is probably a good thing. They need fresh ideas.