Isuzu earmarks 3k cr for Sri City unit
http://timesofindia.indiatimes.com/...ity-unit/pmarticleshow/27203305.cms?prtpage=1
Isuzu may be planning its debut in India but its engines have long powered a number of SUV models with CK Birla group company AVTEC manufacturing the powertrains. Isuzu's decision to set up a production base in India will not change those "existing arrangements" said a top company official.
AVTEC has been manufacturing Isuzu engines for local and MNC players like
General MotorsIndia. CK Birla group flagship
Hindustan Motors is also under a contract manufacturing deal with Isuzu for the production of the Japanese company's MU-7 SUV.
The company's first India-made product, the MU-7, was launched on Tuesday and bookings have begun. The MU-7 is powered by a 3.0-litre diesel engine producing 120kw of power and 360nm of torque. The SUV is priced at Rs 22.3 lakh (ex-showroom Chennai) for the BS IV variant and Rs 22 lakh for the BS III variant. Deliveries will start from January. Isuzu has appointed eight dealers in the south, including Chennai, Coimbatore and Madurai. The company aims to appoint 60 dealers in the next two years.
Takashi Kikuchi, MD, Isuzu Motors India, said: "Isuzu has sold the right to produce the 1.8 litre diesel engine to Hindustan Motors and so they can continue to make that engine. The HM Ambassador currently uses that engine and AVTEC also manufactures it for General Motors India for its Tavera model. In that sense, AVTEC is making engines for GM India and there is no direct relationship with Isuzu so that arrangement will not be impacted by our decision to come to India," he said.
The Isuzu 1.8 litre engine was once used by a number of other models in India including the Mahindra Bolero. AVTEC produces the engine both for in-house (HM) requirements as well as outside OEMs like GM India. Mahindra Bolero no longer uses the Isuzu engine. Isuzu's current arrangement with HM signed in June 2013 includes a contract manufacturing relationship with HM under which the Japanese company will use the Indian auto maker's Thiruvallur plant near Chennai to make the MU-7 SUV and D-Max pick-up slated for debut in India. The MU-7 was earlier sold as a completely built unit (CBU). The HM plant will churn out 5,000 units a year.
Although Isuzu is setting up its own plant in Sri City,
Andhra Pradesh, at an investment of Rs 3,000 crore, it has "no time limit" for its contract manufacturing arrangement with HM. "Our plant should be up and running by 2015-16, but we can continue to have the current products manufactured in the HM plant depending on their product plans, etc. We can do it and we would like to continue relationship with them," said Kikuchi. Officials said the new plant will be capable of producing 1.20 lakh units a year. Isuzu also plans on localizing nearly 70% of components for the MU-7 and the D-Max pick up truck in the coming years.
"Isuzu will continue to focus on "SUVs and light commercial vehicles like pick-ups because in the current market situation, these segments are expanding," said Kikuchi. It may also use India as a production hub because this market "has huge potential with so many big suppliers and so many vehicle makers manufacturing here but it has not been finalised yet," he added.
India is developing, suburban factory district of Vikhroli, Mumbai turning residential.
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