Maruti Suzuki India share price jumped 3 percent in the morning session on March 21 after Japan's Suzuki plans to invest $1.4 billion for EVs at India factory.
Suzuki Motor holds majority stake in the Indian auto major Maruti Suzuki. Suzuki Motor Gujarat Private will invest Rs 31 billion by 2025 for increasing production capacity for battery EV manufacturing and Rs 73 billion for construction of plant vehicle batteries, the company said.
It is the first major EV plan announced by Maruti Suzuki for India in a bid to align itself with a national strategy to reduce oil dependence and cut debilitating air pollution in major cities.
Japanese Prime Minister Fumio Kishida, visiting his Indian counterpart, Narendra Modi, on Saturday announced $42 billion of investment in India over the next five years.
This is an important step for Maruti Suzuki as it marks the EV foray for Suzuki Motor Corporation’s Indian arm. However, no change has been announced in the EV launch timeline which Maruti had set as 2025, hence earnings won't get any immediate bump from EVs although the sentiment will continue to remain positive.
Under the MoU mentioned above, Suzuki Motor Corporation's wholly owned Suzuki Motor Gujarat Pvt Ltd (SMG) will invest Rs 7,300 crore for the construction of battery plant near SMG’s automobile manufacturing unit by 2026. SMG will invest another Rs 3,100 crore for ramping up production capacity for EVs by 2025.
Another group firm Maruti Suzuki Toyotsu India Pvt Ltd will invest Rs 45 crore in construction of vehicle recycling plant by 2025. This comes after Maruti Suzuki and Toyota Tsusho Group had announced in November 2019 a joint venture for vehicle dismantling and recycling and set up a unit in Noida, Uttar Pradesh.