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Suzuki to build Nissan cars for Europe in India

Written by: Staff
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TOKYO, July 4 (Reuters) Japan's Suzuki Motor Corp. will build a new compact car in India for Nissan Motor Co. to sell in Europe, Suzuki's chief executive said on Tuesday.

Last month, the two Japanese auto makers signed a broad-based pact to supply each other with vehicles and share manufacturing facilities around the world to boost efficiency.

Under the agreement, Suzuki was to develop and build a new compact car for Nissan, mostly bound for the European market, starting in 2008. The partners provided no other details at the time.

''It has been decided that we would develop a new A-category car in the smallest segment of the Indian market, and build it in India, including for export to Europe under Nissan's badge,'' Suzuki CEO Osamu Suzuki told a news conference in Tokyo.

Nissan is separately planning to consign production of a car to one of Suzuki's factories in India, it said last month, as a shortcut into the fast-growing market.

The new small car to be developed by Suzuki would be based on one of its 660cc minivehicles sold in Japan, and re-engineered to carry a 1-litre and 1.2-litre gasoline engine, a company source said. A diesel version would not be available due to size limitations, the source added.

Suzuki, which dominates the Indian market through its unit Maruti Udyog Ltd , has a 500,000 cars-a-year plant in India and is building a second one, with initial annual capacity of 100,000 cars, due to start operations by year-end.

That plant will be expanded to 250,000 units some time after March 2008, Suzuki has said.

REUTERS DKS GC1937

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