Suzuki Plans New Factory For Fuel-Efficient Cars

Suzuki Motor Corp said Aug. 9 it would build its first factory in Japan in 25 years at a cost of $500 million as it struggles to meet demand for fuel-efficient cars amid soaring oil costs. Suzuki -- which is also ramping up production in India, Hungary and Pakistan -- said it will invest 60 billion yen (US$520 million) to build the factory in central Shizuoka, with construction to begin this fall.The plant will begin operating at the end of 2008, with annual production capacity of 240,000 compact vehicles.

"We had a large back-order situation overseas, with countries in Europe, North and Central America, and Southeast Asia demanding to increase production for our Swift and SX4-Grand Vitala," said Suzuki Motor chairman Osamu Suzuki.

"After much thought, building a factory in Japan was the best solution. For us, doing it 'our' way is the best way," he said. It is Suzuki's first compact car factory in Japan and its first new factory in the country of any type since 1983, a company spokesman said.

Suzuki said his company would move away from mini-vehicles, of which it is the top manufacturer in Japan, decreasing production by 30,000 throughout the current fiscal year. "We are adapting to a rapidly changing environment. We cannot construct any more four-wheeler factories as demand is very restricted," Suzuki said.

Fast-growing demand for compact vehicles drove up Suzuki Motor's net profit by about 20% to 20.26 billion yen (US$177.2 million) in the first quarter, up from 16.83 billion the previous year. The company plans to increase production capacity in its overall overseas factories by 1,760,000 by fiscal year 2009.

Suzuki holds a majority stake in India's largest car manufacturer, Maruti Udyog. It said Maruti Udyog's production would increase from 630,000 vehicles this fiscal year to 960,000 vehicles fiscal year 2009. Its Magyar assembly plant in Hungary will increase from 160,000 vehicles this fiscal year to 300,000 by fiscal year 2008. Suzuki also plans to increase production in its Pakistani factory Pak-Suzuki from 110,000 vehicles to 170,000 vehicles in fiscal year 2009.

Copyright Agence France-Presse, 2006

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