Maruti gets electric boost as Suzuki vows to produce lithium ion batteries by 2020

Gandhinagar: Japanese automaker Suzuki Motor Corp. on Thursday said that its joint venture partnership with Toshiba Corp. and Denso Corp. will start making lithium ion batteries for India and international markets from 2020.

The move comes as a shot in the arm for Suzuki’s local unit and India’s largest car maker Maruti Suzuki India Ltd, which is considered to be a laggard in green technology space when compared with its rivals in the market. Globally, Suzuki also does not have effective technology in the sphere and sought partnerships, first with Volkswagen AG; and now Toshiba and Denso, to beef up its presence in the space. Suzuki also has an agreement with Toyota Motor Corp. to jointly develop future technologies.

The lithium battery plant of Suzuki in Gujarat would see an investment of Rs1,151 crore ($180 million). The battery plant will come up at the Suzuki Motor Gujarat (SMG) campus in Hansalpur, where land has been allocated to the project inside the vendor park. SMG is a unit of Suzuki Motor and has a contract manufacturing agreement with Maruti, which buys SMG’s produce at cost price.

Osamu Suzuki, chairman of Suzuki, said that the joint venture’s production would be directed towards hybrid car requirements. Production capacity details were not disclosed.

“We plan to continue with our efforts to promote Make In India program further,” Suzuki said.

He also added that the company will invest an additional $600 million for setting up its third car manufacturing unit in Gujarat’s Hansalpur area, taking its overall investment in the factory to $2.1 billion. With the third unit in place, the company’s overall production capacity in the Gujarat would go up to 750,000 vehicles. The Hansalpur facility will create employment for 10,000 people.

Earlier this year, SMG commissioned its Gujarat factory with an annual capacity of 250,000 units. Currently, it manufactures the Baleno model which it sells in the domestic market and also exports.