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Nissan, Suzuki JV in India

On the back of the announcement, Maruti Udyog's share prices shot up around 14% at the BSE.

india Updated: Jun 06, 2006 15:44 IST

Suzuki Motors Corp, the parent company of car market leader Maruti Udyog, on Thursday announced a manufacturing collaboration with Nissan Motor co and said they will begin joint production in India.

"Nissan and Suzuki will start manufacturing collaboration in new emerging markets by sharing their respective manufacturing facilities. This activity will start at Suzuki's plant in India," a statement by the companies said in New Delhi.

On the back of the announcement, Maruti Udyog's share prices shot up around 14 per cent at the Bombay Stock Exchange and were trading at Rs 776.30 in late afternoon.

Nissan and Suzuki announced they have agreed to expand the scope of their business collaboration in various markets.

Further to the existing OEM (original equipment manufacturer) supply of Suzuki minicars to Nissan and the supply of automatic transmissions to Suzuki through Nissan's affiliate company Jatco Ltd, the two companies said from the end of this year, Nissan will supply a minivan to Suzuki on an OEM basis and Suzuki will supply another Suzuki mini-vehicle to Nissan on an OEM basis. "Both products are for the Japanese market," the statement said.

Further, Nissan will supply a compact pick-up truck to Suzuki from 2008 on an OEM basis for sale mainly in North America while Suzuki would provide a new A-segment vehicle for Nissan on an OEM basis for sale mainly in Europe.

"Through our existing agreement with Suzuki, we have built up a relationship of trust and partnership for mutual benefit," Nissan Chief Operating Officer Toshiyuki Shiga said.

The expansion was part of Nissan's continuing drive into new market segments and further global expansion, as set out in the Nissan Value-Up business plan, he said.

Suzuki President and Chief Operating Officer Hiroshi Tsuda said the expansion of business collaboration with Nissan would strengthen Suzuki's global competitiveness through pursuit of economies of scale in production volume by additional OEM business opportunities.

"It will also ensure that Suzuki achieves its midterm five-year business plan by complementing its product portfolio in new segments," Tsuda said.

Speaking to reporters Maruti Udyog Managing Director Jagdish Khattar said the business collaboration between Suzuki and Nissan was a positive implication for the company as well as its stake holders.

"Maruti Udyog Ltd and its stakeholders stand to gain from this," he said.
Asked whether the development would also mean further expansion by Maruti Udyog he said, "Expansion will have to take place."

However he refused to divulge further details, saying that the details were being worked out.