Suzuki, Toshiba, Denso to invest Rs 1,200 crore in India to make batteries for electric vehicles
The joint venture company of Suzuki, Toshiba and Denso will be established within 2017 and shall move to manufacturing phase at earliest possible timing.Updated: Apr 14, 2017 13:49 IST
Suzuki Motor Corporation, Toshiba Corporation and Denso Corporation will establish a joint venture company this year to make lithium-ion battery packs for vehicles in India.
The three companies “signed the agreement” and an initial investment of 20 billion Japanese yen (nearly Rs 1,200 Crore, $184 million) will be made in this joint venture, Suzuki Motor Corporation said in a statement on Friday.
The announcement is expected to supercharge the electric vehicle sector in the country, which has not really picked up with just a handful of other electric automakers in the market.
“The joint venture company will be established within 2017 and shall move to manufacturing phase at earliest possible timing,” Suzuki Motor Corporation said in a statement.
“The joint venture company will be capitalised at 2 billion Japanese yen, with the planned participation ratio of Suzuki 50%, Toshiba 40% and Denso 10% respectively,” the statement added.
The JV company will be the first big venture dedicated towards making automotive lithium-ion battery packs in India.
“In the Indian automotive market where compact cars are the mainstream models, introduction of sustainable technology suitable for such affordable cars is required. The battery pack manufacturing joint venture by the three companies will realise stable supply of lithium-ion battery packs in India in the course of promoting sustainable cars in the country and will contribute to “Make in India” initiative by the Indian government,” the statement said.
“Establishment of the joint venture company will be further examined in details by the three companies, and subject to approval by respective authorities in accordance with applicable competition laws,” it added.
The announcement comes against the backdrop of India’s commerce and industry minister Nirmala Sitharaman’s meeting with top executives of Toyota, Suzuki, Hitachi, Aichi Prefecture and Soft Bank to draw investments flows into India.
“Make in India”, the campaign started by Prime Minister Narendra Modi in September 2014 to bring foreign investment into the country, is one of the top cards used by Sitharaman during her visit.
“India wants to increase the contribution of manufacturing sector to GDP to 25% and Japan is a natural partner in our goals,” she said at the India conference in the Japanese city of Nagoya.
One of the top automobile companies in the world, Suzuki has over three decades of India connection. Maruti Suzuki, its India arm, holds more than 46% of market share in the passenger vehicles market.
Toshiba too has over five decades of history in India, with investments in sectors like railway systems, batteries, elevators, water treatment and power systems field. “We are on track with the Rs. 3000 crore investment since 2013 and currently employ close to 10,000 people in India,” Tomohiko Okada, MD Toshiba India Private Ltd, says on the company website.
Denso, a global technology company too has been in India since 1986. It supplies components to automotive and consumer durable companies, and houses one of its seven global research and development centres in India.
The joint venture company will make lithium ion automotive batteries in India to energise electric vehicles in India, a sector that has hardly been accepted due to the steep development costs and little government support.
In 2010, Mahindra & Mahindra acquired Bengaluru-based electric car company Reva and today sells two electric cars, e2o Plus and e-Verito in the India market.
No further details on the JV were disclosed. A response from Suzuki on more details is awaited.
First Published: Apr 14, 2017 12:42 IST