Suzuki Motor Corp. is planning to build a new $500 million factory in Japan and expand production in places such as Hungary and India to cash in on the rising demand for fuel-efficient, small cars created by soaring global gasoline prices.
"Strong sales of Swift, SX4 and Grand Vitara in Europe, North America, Latin America, Oceania, etc. has caused significant backorders, and thus constant request for increasing production from all over the world,'' Suzuki said in statement announcing the plans.
The company also said it expects sales to top 3 trillion yen or about $26.1 billion in the coming fiscal year.
The new plant, the first the company has built in Japan in 25 years, is expected to start operations in late 2008 with a capacity of about 240,000 vehicles a year. The project will boost Suzuki's production capacity to about 3 million units annually. Demand for small cars is being fueled not only by high gasoline prices but also by Suzuki's broadened alliance with Nissan Motor Co. Suzuki supplies Nissan with minicars with engines of less than one liter, which are popular in Japan because they get tax breaks.
Suzuki also said it is planning to increase production in Hungary, India and Pakistan. Output at the Hungary plant will rise to 300,000 units a year by 2008, from 160,000 now, while production in India is seen climbing to 960,000 vehicles by 2009, from 630,000. In Pakistan, Suzuki plans to raise output to 170,000 units by 2009, from 110,000 now.
Joe Szczesny (www.thecarconnection.com)
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