Suzuki To Shift Its Export Operations To India In 2014

Suzuki will shift almost it's entire export operations to India before the end of the 2014 fiscal year, R.C. Bhargava, chairman of Maruti Suzuki India Ltd has said. Speaking to LiveMint, Mr. Bhargava stated that starting from 2014 Suzuki will start shifting its export base from its home country to India, which will become the export hub for Suzuki's markets in the Middle East, Africa, South America and South East Asia.

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Suzuki's overseas marketing division, which functions on a territorial basis will set up its headquarters at the Maruti Suzuki office in Vasant Kunj, Delhi. The entire overseas operations workforce will be based out of this office, with the export headquarters reporting to Maruti Suzuki.

The reason for Suzuki's decision to base its exports operations in India are several, one being an ageing population in its home country and the increasing salaries there. In addition to those, India is now in a favourable position, in general, for exports.

The rupee depreciation against US dollars makes it profitable for companies to export from India. Also helpful is India's strategic location, with easy access to several large ports.

In the recent past India has seen several foreign automakers set up export operations in India, including Hyundai and more recently Renault-Nissan Alliance and Ford Motor Co.

Suzuki is largely dependent on its Indian asset, Maruti, in which it has 56 percent stake. 40 percent of Suzuki's revenue comes from Maruti and India. Making India all the more important the Japanese automaker is poor sales across Europe and its recent exit from the U.S.

The coming years may see India turn into a major export hub for automobiles as manufacturing costs in western countries continue to go up.