Hindustan Motors may assemble Isuzus

Isuzu Motors is in talks with Hindustan Motors for assembling its light truck and sports utility vehicle range for sale in the Indian market, deputy managing director of the Japanese firm Shigeru Wakabayashi said.

Isuzu is setting up a greenfield automobile unit at Sri City special economic zone in Chittoor district in Andhra Pradesh, which is expected to start production late 2015.

Till the time the plant comes up, the company would import completely knocked down (CKD) kits from Thailand and assemble them at a contracted facility like the one at Hindustan Motors, Wakabayashi said.

Isuzu’s Andhra facility, which will have an eventual capacity of 1.2 lakh units, is being set up with an investment of about Rs1,500 crore to be made over the next five to seven years.

“We are planning to sell about 80,000 units in the domestic market and export about 40,000. The domestic market is growing at a healthy pace,” he said.
Isuzu has two manufacturing facilities in Thailand and China, which export vehicles to about 100 countries.

“We plan to produce pick-up truck D-MAX and pick-up derivative MU-7 from the AP facility and are studying the details on various activities such as stamping, welding, painting, assembling, engine  manufacturing and transmission assembling,” Wakabayashi said.

He said the Indian auto industry is estimated to expand to 10-15 million units  over the next 10 years from 3.6 million now.

The company also plans to make use of the low-cost advantage available in the Indian auto components market to support its Thailand facility.

Meanwhile, Andhra Pradesh, which has been waiting for decades for an automobile plant, is pinning hopes on Isuzu.  With no ancillary network in place, the auto units have been shunning the state for locations that have such built-in ecosystem.

The Japanese major chose to set its unit in Chittoor is mainly due to proximity to Chennai, which has an ancillary set-up, said sources.

@ramanakv