Denso, a Japanese auto component maker, is set to expand production in India, where it plans to spend about 15 billion yen ($132 million) between now and 2025.
The money will go toward adding to an existing facility in the state of Haryana, west of New Delhi, to increase capacity for making engines and other parts by about 50 percent.
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The Toyota Motor affiliate intends to meet growing demand from Maruti Suzuki India, which has been experiencing significant sales growth.
Maruti Suzuki, India’s largest automaker, is a unit of Japan’s Suzuki Motor.
Other Toyota-affiliated component makers, including Jtekt and Toyoda Gosei, are also increasing production in India to meet demand in the rapidly expanding market.
The Haryana plant produces injectors, which are used alongside engines, and electronic control systems for automakers, primarily Maruti Suzuki.
Denso also plans to build a new facility next to the existing one at the plant. Construction is to start this coming spring and be completed in the spring of 2019. The plant’s total floor space will increase from 20,000 sq. meters to 32,000 sq. meters. The additional unit will be fitted with new equipment in stages before starting full production in 2025.
India’s passenger vehicle sales have been growing at 7 percent to 8 percent annually for the past five years. The figure exceeded 3 million in 2016. In the year through this past March, Suzuki sold 1,445,000 units in India, up by 140,000, or 11 percent, from a year before. Takahiko Hashimoto, a Maruti Suzuki executive in charge of sales, thinks “similar growth will continue for some time.”
Suzuki Motor has also set up a wholly owned subsidiary in India, Suzuki Motor Gujarat, and a new plant in the western state of Gujarat. The plant, which opened in February, is capable of producing 250,000 vehicles a year. Suzuki plans to gradually triple the plant’s capacity.
In addition to finding ways to accommodate Suzuki’s increased production in India, component makers also need to respond to tightening regulations in the country. The Indian government in 2020 plans to introduce environmental regulations comparable to those in Europe. In 2022, it will introduce Asia’s most stringent fuel efficiency regulations. Denso’s planned expansion in India is aimed at supplying products that meet the strict emissions standards, said Keiichi Yamauchi, chairman of Denso International India.
