Isuzu bets big on pickups mkt in India

The Japanese automaker, which is setting up Rs 3,000-crore auto plant in Sri City, also looks to create a niche for itself in premium SUV segment currently dominated by Toyota

Isuzu Motors shares special relationship with Andhra Pradesh. The Japanese automaker opened its first showroom in India in Hyderabad a year ago. This was followed by an historic agreement with AP Government to set up Rs 3,000-crore light commercial vehicle (LCV) plant at Sri City SEZ in Chittoor district. The plant which will initially produce 50,000 units by the fiscal year 2015-16 is expected to help the automaker garner decent market share in India. “With our plant located in Sri City, we will initially focus on south India before expanding our network to other parts of the country. Our focus areas are pickups and premium SUVs,” Takashi Kikuchi, President and Managing Director, Isuzu Motors India Private Limited, told The Hans India in an interaction.

Excerpts:

Which are the focus areas for Isuzu Motors in India?

We are here to focus on premium sports utility (SUV) as well as pickup segments, initially. We have already launched MU-7 SUV which will compete in the premium segment, and D-Max pickup. We strongly believe that this is the right time to enter into pickup vehicles market in the country as it is set to register huge growth in coming years in the wake of expansion in urban centres. That’s the main reason why pickup segment is growing despite huge de-growth in commercial vehicle sales. Currently, the size of pickups market is pegged at 200,000 units a year. We hope to garner a significant chunk of it in the next few years.

What are your plans for the plant at Sri City?

We will invest Rs 3,000 crore into the plant which will initially make 50,000 units a year. The first phase production will commence in the fiscal 2015-16. Gradually, we will expand the capacity to 1 to 1.2 lakh units. When it comes to employment generation, the plant will employ over 2,000 people in the first phase. As our manufacturing base in Sri City, our first focus will be south India before foraying into other parts of the country.

What kind of localization you would like to achieve in the country?

Our objective is to achieve 100 per cent localization when we complete the plant. That means we will source all the components from India itself. This activity will generate additional jobs. However, we are yet to decide whether to invite local parts makers to set up their units near our plant in Sri City. But our intention is to produce our models here with locally-made parts and components. Besides, our models also come with several features that will suit the needs of Indian customers.

What is your arrangement with Hindustan Motors?

Initially, we imported our models as completely built units (CBUs) and sold them in India. As that is an expensive proposition, we signed a contract manufacturing agreement with Hindustan Motors to use its plant at Thiruvallur near Chennai to assemble our models. Now, we will bring the models as CKD units and assemble upto 5,000 units a year at the plant until our facility is ready. Now, we are selling India-made models only. At present, we have three showrooms, but plans to expand the network to 60 outlets soon.

Your Isuzu MU-7 SUV’s price is very close to Toyota Fortuner. Then how can your model compete in the market?

The size of premium SUV market in India is around 30,000 units per annum. Toyota Fortuner commands almost 80 per cent of the market. Our MU-7 which is priced at Rs 22.6 lakh (ex showroom, Hyderabad) comes with largest wheelbase of 3 metres in the segment. Our model also offers better space, technology and features. Therefore, the MU-7 will generate decent sales for us.