Will establish a wholly-owned subsidiary in August that will be headquartered in Chennai

Japanese commercial vehicle maker Isuzu will introduce low-cost light commercial vehicles in India by the end of this year, and plans to set up a production facility in the future.

According to Isuzu Motors’ mid-term business plan till March 2014, the company will launch low-cost light commercial vehicles in India by the end of 2012 as fully imported units.

“This is part of Isuzu’s mid-term business plan to develop a new LCV business in India’s rapidly growing market,” the company said.

Anticipated improvement of roadway infrastructure and increase in per capita income have led Isuzu Motors to view India as an opportunity to continue its business expansion, besides deciding to begin the LCV business here, it added.

Sale of the LCVs, which will be shipped from Thailand in the form of finished vehicles and knocked down kits, will begin before the end of 2012.

To commence operations, the 1,400 billion yen Japanese firm, will establish a wholly-owned subsidiary under a proposed name — Isuzu Motors India Pvt. Ltd. — in August that will be headquartered in Chennai.

The company will establish an “Isuzu-driven manufacturing operations and sales network” and plans to sell about 1,500 vehicles in the first year. “The company also plans product developments tailored for local needs, localisation of parts and the expansion of its sales channel, and in future, a local manufacturing plant will be established with the target sales volume of 1,00,000 vehicles per year,” it said.

The company is reportedly planning to invest Rs.1,000 crore to set up a plant with a production capacity of 1-1.2 lakh units annually that is likely to come up by 2014-15. It is exploring sitesin Andhra Pradesh, Tamil Nadu and Gujarat. In its mid-term business plan, Isuzu Motors said it would develop China and India as the “core Isuzu business”.

“India’s automobile market has been growing rapidly in size from 9 lakh units in 2002 to 33 lakh units in 2011, thanks to the country’s steady economic growth, and a further expansion of the market is expected,” it added.

At present, Isuzu Motors is present in India through commercial vehicle maker SML Isuzu (SMLI), promoted by Japan’s Sumitomo Corporation. Isuzu holds 15 per cent stake in SML Isuzu (SMLI), while 43.96 per cent is with Sumitomo Corp.

Isuzu Motors said it would strengthen SMLI functions, including despatch of engineering and sales personnel from Isuzu and would introduce “best suited product for India, equipped with Isuzu components based on existing SML truck”.

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