Isuzu Motors to invest Rs 3,000 cr in AP manufacturing unit

Isuzu Motors India is likely to invest Rs 3,000 crore at its manufacturing plant in Andhra Pradesh over five years, a top company official said here today.

The ceremony to start construction for the plant at Sri City is likely by the end of this month, Isuzu Motors India president and managing director Takashi Kikuchi told reporters here, after unveiling the MU-7.

"As a first step, we will have a production capacity of 50,000 when we start production in 2016. Within three years, we will try to increase to 80,000. That is 2018-19. By 2020, we would like to increase further up to 100,000. That is the target for the time being," he said.

Isuzu has a contract manufacturing agreement with Hindustan Motors Ltd under which HML is assembling CKD kits of Isuzu's sports utility vehicle MU-7 and pick-up truck D-Max at its Thiruvallur, Chennai plant.

The complete localisation of production is expected to be through within three years after 2016, he said.

"May be 2018, we will achieve 100 per cent localisation," he said.

Asked if the market conditions would affect the demand for the vehicles as they are expensive, Isuzu India Deputy MD Shigeru Wakabayashi said Indian economy is growing up and that market is likely to look up after six months this year.

"Everybody believes Indian economy will be expanding," he said.

The company has sold about 200 vehicles so far, out of which SUV are 50-60 and the remaining are pick-up vehicles, he said.

The company will be producing SUVs and Light Commercial Vehicles (LCVs) in the new production plant, he said.

Isuzu MU-7 is priced at Rs 22.6 lakhs (ex-showroom, Hyderabad) and the price of pick-up vehicles is around Rs 6.5 lakh.

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