Isuzu Motors is one of the recent entrants in the Indian automobile industry. Mr Takashi Kikuchi, Managing Director, Isuzu Motors India shares his views on the entry strategy and growth potential of the Indian market.
What is the entry strategy of Isuzu in India and future plans?
Isuzu commenced its operations in India in early 2013 by bringing in limited volume of completely built units (CBUs) for test marketing and developing a better understanding of the Indian customers. Currently, Isuzu Motors started assembling CKD units of Isuzu’s sports utility vehicle MU-7 and pick-up truck D-Max, in contract manufacturing with Hindustan Motors Limited starting December 2013. The company has committed to invest Rs 3,000 crores for setting up an LCV manufacturing facility in Sri City, TADA, Chittoor district. For this manufacturing facility, Isuzu acquired 107 Acres of land in 2013, after signing MoU with the Andhra Pradesh State Government and Sri City. The company broke ground on this proposed manufacturing facility in January 2014. This facility is likely to commence commercial operations by early 2016, with initial production capacity at 50,000 units/ year. Isuzu will scale up the production capacity to 120,000 units/ year, and is expected to generate 2000~3000 jobs. Isuzu Motors India plans to achieve 100% percent localization within three years of commencing production in 2016.
Can you throw some light on the current market size of commercial vehicles industry and the growth potential?
We believe the Indian automotive market is at a tipping point, and the real growth is only starting now. In particular, the pickup trucks and utility vehicles are the fastest growing segments in the last 2 years and we expect the growth to continue. The pickup trucks segment today accounts for the largest share of the overall commercial vehicle market at 35% and Utility vehicles now account for 20% of the passenger vehicle market. We expect the market to grow to more than 10 Mn in the next 10 years.