NEW DELHI: Japanese small car major Suzuki Motor Corporation expects its arm Maruti Suzuki to shoulder more responsibility in developing India-specific products focussing on high-end technology which in turn could mean lesser royalty.
“The main responsibility of our Indian R&D is to develop suitable products for the Indian market. Maruti Suzuki will be shouldering more and more responsibility in this regard,” Suzuki Motor Corporation President and COO T Suzuki told reporters here.
Stressing that entry of other global players has increased competition in India, he said: “We have to develop more suitable products for the Indian market.”
When pointed out that this could mean lesser royalty to SMC, Suzuki said that the Japanese parent has been focussing on high end technology products like hybrid and fuel cell vehicles, which MSI could use, as India moves to stricter emission and safety norms in the future.
“But irrespective of changes in royalty, we will continue to invest in R&D in Maruti,” Suzuki added.
Maruti Suzuki has been investing Rs 2,500 crore to set up its R&D centre at Rohtak which boasts of a test track among others to enhance its production development capabilities.
Maruti Suzuki India will be unveiling compact SUV Vitara Brezza tomorrow at the Auto Expo, a global product in which Indian engineers have played a major role in design and development.
MSI has already stated that starting with the compact SUV, it will pay royalty to its parent Suzuki in rupee instead of yen for all new models. The move is expected to result in an average royalty rate of 5 per cent of net sales as compared to 5.6 to 6 per cent for the existing models, which are paid in yen.
When asked about SMC’s plans to avoid over dependence on India, Suzuki said that the aim is to expand in Europe, Asia and other markets and increase profitability while at the same time ensuring that the Indian operations also continue to increase profitability.
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