Isuzu Motors Ltd. is all set to establish a company in Chennai in August to produce and sell light commercial vehicles (LCVs). The move comes as part of Isuzu’s mid-term business plan to develop a new LCV business in India’s growing market.
The company, tentatively named Isuzu Motors India Pvt. Ltd., will be a 100 per cent subsidiary of Isuzu Motors Ltd. with an initial investment of Rs. 300 million.
The sale of LCVs shipped from Thailand in the form of finished vehicles and knock-down kits will begin before the end of 2012.
Isuzu plans to sell around 1,500 vehicles in the first year. It also plans to develop products which are tailored for local needs, localization of parts and expansion of its sales channel. In future a local manufacturing plant will be set up with an targeted sales volume of 100,000 vehicles.
India’s automobile market has been growing rapidly, from 900,000 units in 2002 to 3.3 million units in 2011 with the country’s steady economic growth. A further expansion of the market is expected. Improvement in roadway infrastructure and increase in per capita income will positively facilitate this expansion. Viewing these developments as an opportunity, Isuzu Motors has decided to launch its LCV business in India.
The entry of Isuzu is sure to intensify competition in the growing LCV segment in the country, and it will be interesting to see the company battle it out for a market share with more established players in the field.