Isuzu Motors India to rope in 200 vendors, targets 2,000 unit sales in 2014

Bangalore: Isuzu Motors India plans to source components from around 200 vendors in India when it commences manufacturing operations at its upcoming greenfield plant in Andhra Pradesh. This is according to Takashi Kikuchi, president and managing director of Isuzu Motors India, who spoke to Autocar Professional on the sidelines of a dealership inauguration in Bangalore today.

Earlier this week, Isuzu held the ground-breaking ceremony for its own manufacturing facility at Sri City in the Chitoor district of Andhra Pradesh.  The plant is expected to commence operations in 2016.

 “With the procurement of components from local vendors, the company can achieve 70 percent localisation on its vehicles to be manufactured at the new plant in the first year itself,” he added.

The Japanese major is confident of achieving 100 percent localisation within three years of commencing production at its Andhra Pradesh plant. Localisation is a key part of an OE’s strategy to price its products affordably.

Kikuchi said the company will target sales of 2,000 units including its SUV, the MU-7 and pick-up truck D-Max in India in 2014.  “Next year, we are targeting sales of 5,000 units,” he added.

Isuzu has been importing these vehicles as CBUs. Recently, it started importing CKD kits that are assembled at the Hindustan Motors plant at Thiruvallur in Chennai, under a contract manufacturing pact.

The Bangalore dealership, Trident Isuzu, owned by the Trident Group, in Bangalore is the company’s fifth dealership. Isuzu has already established showrooms in Hyderabad, Coimbatore and Kochi. Going forward, it plans to open dealerships in Tirupati, Vizag and Madura. In 2014, the company will have a total of 12 dealerships across the country. “Bangalore, globally known as the Silicon Valley of India, is a mix of economic and cultural hub and is one of the fastest growing cities in India,” Kikuchi said.

When it commences production at its new manufacturing plant, Isuzu will have 60 dealerships across the country, he added. Isuzu has earmarked Rs 3,000 crore as an investment for its new manufacturing plant in Andhra Pradesh with a production capacity for 50,000 units initially which can be scaled up to 100,000  units by 2020.

So far the company claims it has sold 200 CBUs of the MU-7 and D-Max in India. The MU-7 is priced at Rs 22.7 lakh while the D-Max retails at Rs 6.8 lakh (both prices, ex-showroom Bangalore).

Photograph (L-R): Takashi Kikuchi, president and MD of Isuzu Motors India, and Shigeru Wakabayashi, executive vice-president, launch the MU-7 in Bangalore for the Karnataka market.