TOKYO -- Suzuki Motor will establish a lithium-ion battery manufacturing company in India with Toshiba and Denso by the end of the year as a step toward broadening its lineup of hybrid vehicles there.
The Japanese automaker said Friday that it has reached a basic agreement with the two compatriots to create the joint venture at a capitalization of 2 billion yen ($18.4 million). Suzuki will contribute 50% of the amount, with Toshiba and Denso putting up 40% and 10%, respectively.
This joint venture will build a plant at a cost of roughly 20 billion yen. Construction likely will take a year and a half to two years. Once production starts, the company will provide lithium-ion batteries to Suzuki, whose local subsidiary, Maruti Suzuki India, controls a little more than 40% of that country's passenger car market.
Due to severe air pollution, the Indian government is expected to gradually tighten automobile emissions standards. By expanding its hybrid lineup ahead of rivals, Suzuki aims to remain highly competitive in the South Asian country. The automaker is already selling the Ciaz hybrid sedan and the Ertiga hybrid minivan in India, which store electricity in lead batteries. Using lithium-ion batteries instead will boost such vehicles' performance.
"We want to make eco-cars popular in India by establishing a capability to supply [lithium-ion batteries] reliably in a sufficient volume domestically," Chief Technology Officer Osamu Honda said during a news conference in Tokyo Friday.