Japanese truck and sports utility vehicle (SUV) maker Isuzu Motors is scouting for a local partner to assemble its vehicles in India.
Though it plans to start the full-fledged manufacturing in the next 3-5 years, the company is looking to start the assembly of its products as soon as possible to avoid rising import duties in the country.
The finance minister last week announced an increase of duties on imported vehicles.
Isuzu India, the local unit of the automaker, has launched three models -- SUV MU-7 and two models of D-Max pick-up -- which currently are being imported from its factory in Thailand.
“The import duties on our vehicles will get impacted by the change announced in the Budget. Local assembly will have to be looked at as soon as possible now,” said Shigeru Wakabayashi, deputy managing director, Isuzu Motors India.
The company is setting up a factory in South of India with an investment of `1,000 crore and localisation of 80-100%. Isuzu sees rising potential in the pick-up segment (2-3.5 tonne category), which grew almost 75% last year. Players including Tata Motors, Mahindra & Mahindra and Ashok Leyland are present in this segment.
“In the short term we are considering an option of partnering with a local auto company for assembling our vehicles. We are talking to different companies. It is not possible to start assembling in 4-5 months, it could take around one year to start operations,” said Wakabayashi.
It also sees India emerging one of its key markets in the next 10 years.
Currently, Thailand is its biggest market where it sells around 200,000 units.
The company is studying the market and has decided to go slow on the overall expansion. It has started two dealerships in Hyderabad and Coimbatore.
“We have full confidence in the Indian market and expect it grow significantly in the next 10 years. As of now, we are at a stage to learn and understand the requirement of Indian customers,” said Wakabayashi. The company plans to go aggressive on pricing once it starts operations in India.