Suzuki Unveils New Subsidiary, Car Plant in India

Suzuki Motor Corp. intends to invest about $485 million through a new subsidiary to build a passenger car plant in Gujarat, India.

The facility will have initial capacity to produce 250,000 cars per year when it opens three years from now. Eventually the plant will be expanded to 750,000 units, according to Suzuki.

The factory will make vehicles for the company's market leading Maruti Suzuki India unit. But the facility will be operated separately by Suzuki Motor Gujarat Pvt. Ltd., a new wholly owned subsidiary of the Japanese carmaker.

Suzuki says the unusual structure will help keep the company's new product plans moving, while enabling Maruti to conserve cash and focus its attention on expanding its dealer and service operations.

Last year Maruti temporarily suspended construction of an assembly plant in Haryana, citing sluggish car sales. Suzuki is confident the market will rebound by the time the Gujarat plant begins production.