2013 South India Special - Takashi Kikuchi, Managing Director, Isuzu Motors India

Why did you choose HM as a partner for contract manufacturing?
Isuzu has had a long partnership with Hindustan Motors as well as a long history of manufacturing the Isuzu range. It takes time to conclude an agreement but now is the best time because the pick-up market is taking off in India. We visited Sri City, located 60-70km from the HM plant where products can be produced at the least cost. We are starting assembly operations because production volumes are still limited and will subsequently increase it. HM has capacity constraints as Mitsubishi models are also produced there and the capacity we can use depends on their volumes as well. But if we invest, production can be increased but we do have plans to set up our own factory.
Do you plan to replicate Isuzu’s Thailand success story with pick-up trucks in India?
Thailand is similar in many ways to India. So we can utilise that success story and business model in India. The GDP per capita is also quite similar to that in Thailand. In Thailand, small business owners, merchants in grocery shops and farmers don’t have their own cars but once they started to buy their vehicles for themselves, a dramatic market change has been seen. We would like to apply this experience to India as there are synergies in small business owners, agriculture and small land owners. But India also has its own differences. It is a vast and diverse country and we have to study very carefully its market requirements.
Isuzu has a strong diesel engine portfolio -- will you supply to other manufacturers as well?
We are open to co-operating with each other and if there is an opportunity, we are ready to provide diesel engines to others. For India, we will utilise the 2.5- and 3.0-litre diesel engines in the pick-up and SUV though globally, we develop a range of engines starting from 1.9 litres to larger ones.
What are Isuzu’s long-term plans for exports and component outsourcing?
Our Sri City plant will have an installed capacity of 120,000 units per annum which we hope to achieve by 2018-19. We have no targets for market share. After meeting domestic demand, it will also cater to the export market. We plan to produce the same products in Thailand and the South East Asian market, so Indian parts can be exported to other ASEAN markets as well.
Will Isuzu look at alternate fuel technology vehicles for India?
Alternate fuel is a possibility. We plan to introduce a CNG vehicle in Thailand. If the Indian market needs it then we are ready but it all depends on India’s own CNG infrastructure.
Have you imparted special training to workers at HM's Thiruvallur plant for rolling out the Isuzu products?
We will be using the existing workforce of HM and don’t think we will need so many for assembly operations. The 200-300 workers there are well-trained workers who produce the Mitsubishi Pajero. They can also produce our vehicles. And yes, they have been trained to assemble Isuzu models.
Does the India-ThailandFTA give some duty exemptions in imports?
The FTA with Thailand reduces duties but it is a complicated import duty structure. Overall, our strategy is not to import from Thailand but to localise in India.