OSAKA -- Nippon Paint Holdings plans to quadruple production capacity for automotive paint in India this year, adding a plant to complement a recent factory upgrade.
The Osaka-based paint maker will spend a total of around 4 billion yen ($34.7 million) on the expansion, raising capacity in the South Asian nation to an annual 25,000 tons of auto paint.
The goal is to have a new plant in the southern city of Hindupur up and running by the end of the year. The factory will produce mostly water-based paint designed to prevent rust. This location will supply such Indian automakers as Tata Motors and is close to a Toyota Motor plant as well.
Nippon Paint has also added capacity at a plant in the northern city of Delhi. Maruti Suzuki India, the country's top automaker, is at work on a new factory in the north, and demand for auto paint is expected to surge.
East Asia accounts for around 60% of Nippon Paint's sales. But in India, where new-auto sales are expected to hit 5.5 million units in 2020, the company has less than 10% of the paint market even after last year's merger of automotive coatings operations with Berger Paints India. Kansai Paint's share tops 50%. With its investment blitz, Nippon Paint aims to close in on its Japanese compatriot and eventually lock down a 30% share.