The global partners coming together is not new in the automobile industry, but the one from Japan and the other from Germany driving into the Indian roads is something peculiar. Volkswagen and Suzuki (the partner with Maruti) have joined hands to share the technical-know for making cars in India. The officials from VW spent some useful hours at the facilities of Maruti-Suzuki at Manesar to have an air of the process dealing which includes product sharing and rebadging of the cars. VW is keen on utilizing this pact for smoothening its products in the Indian car market especially for the compact car which is on the cards. The Chief for VW India said his company’s target is 8% by 2014, by the time Indian car market would have achieved 3 million mark. This requires a conversion of 2.5 lakh units per year against VW’s capacity output of 1.1 lakh and for the proposed increase in production VW is eyeing on securing the technology from Maruti.
However, the Chairman of Maruti-Suzuki is categorical that the tie-up process is exclusive between the two global companies and Maruti has nothing to express. All the process procedures will be met by Suzuki in the Indian scene, he added. The Chief of Suzuki too is keeping fingers crossed over the pact except about the components details. VW had in December 2009 intended to share 19.9% in Maruti-Suzuki at $2.5 billion with Suzuki to increase its focus on the Indian car segment vigorously.
VW is looking for a pact with Maruti-Suzuki on the lines of the latter’s tie-up with Nissan. The existing pact between Maruti-Suzuki and Nissan enables the latter to deal with A-Star for marketing it as Nissan Pixo in Europe. In the meantime, Maruti Suzuki is expanding its facilities number to six by investing a net amount of Rs1,925 crore for getting an increased production about 2.5 cars in another three years. This would make the net capacity to 17.5 lakh by 2015 of which 15 lakhs will be for the domestic market and 15% for export. Maruti is too aware that the Indian car market will see the vertical index to reach 30 lakh units by 2015, according to SIAM.