Suzuki risks losing its customer base with a passenger car catalogue that doesn’t include EVs, and is looking to invest in local start-ups.
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- Suzuki Motor Corp., at risk of losing its customer base due to a passenger-car catalogue without EVs, has set up a $40 million fund to expand its presence in India and seeks to invest in local startups.
Suzuki Motor Corp. has launched a $40 million fund to invest in small rural businesses as it aims to expand its presence in India, one of the world’s fastest-growing markets.
Through the fund, called “Next Bharat Ventures”, Suzuki said on Thursday it would invest in agriculture and microfinance start-ups, adding that it would also provide training to rural entrepreneurs.
Suzuki, through Maruti Suzuki India Ltd, is India’s largest automaker with a 41.6 percent market share, but it risks losing customers because of its limited hybrid lineup and lack of electrified options. The company already reaches about 400 million customers in India through thousands of showrooms and service centers, but the funds will help it reach a wider customer base, Suzuki Executive Vice President Naomi Ishii said.
“Our concern was how to reach and donate to the remaining 1 billion people,” Ishii told Bloomberg News at the company’s headquarters in Hamamatsu.
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Suzuki is expanding into new areas such as biogas in India, where it plans to start operating a factory in June. Suzuki hopes that the fund, which targets village-based small-scale entrepreneurs, will help create business opportunities in underserved areas, increasing its appeal beyond its existing customer base.
“This is a long-term investment,” he said. Ishii, who was previously based in India and headed Toyota Motor Corp’s local unit, said establishing a network of entrepreneurs in India “will be a great asset for the company.”
Suzuki prepares for the future
The new fund will operate out of three offices based in Gujarat, Bangalore and Hyderabad and will be led by Vipul Nath Jindal, an alumnus of the Indian Institute of Technology, Hyderabad.
The school, which has produced many Suzuki engineers, is also home to the Suzuki Innovation Center, which promotes business exchanges between Japan and India. The company said on Thursday that the center will now be run as part of the foundation.
Suzuki is carrying out technology and non-technology related initiatives through the centre to better understand some remote areas of the country and explore new areas, Ishii said.
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For Suzuki, new business “may come from its latest venture plans,” he said.
Toyota is not the only carmaker targeting India’s growing consumer market, especially given the slowdown in the Chinese market. Its local subsidiary said earlier this week it was partnering with the Indian Institute of Science in Bangalore to set up an engineering research lab.
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Suzuki, which primarily makes small, compact internal combustion engine vehicles, has been in the car business in India since 1982 but is facing new competition from local and foreign automakers offering better hybrid and electric vehicles.
First edition publication date: July 6, 2024, 10:08 AM
