MUMBAI: Japanese automaker Isuzu Motors India plans to launch a new seven-seater multipurpose vehicle or MPV to take on Toyota's popular Innova in about two years, extending its South East Asian rivalry with the world's largest car maker in the country.
Isuzu Motors India is developing a premium MPV code named RU30 to grab a pie of growing MPV market after having committed investment of Rs 3,000 crore into a local manufacturing facility in Sri City (Tada), Andhra Pradesh. Besides, people familiar with the matter told ET, company also plans to localise its bestselling pickup truck D-MAX from Thailand in India.
Production of RU 30 is slated to begin in October 2016, with launch likely in the festive season of that year. The company is planning to produce 40,000 units of the MPV per year and 20,000 of the pickup truck, three people privy to the details said.
Without disclosing the company's plans, Isuzu Motors India's president and managing director Takashi Kikuchi said, "Isuzu has two products for the Indian market - the MU-7 in the SUV category and the D-MAX in the pickup segment. We have not yet finalised our detailed future product plan."
About 1.3-1.4 lakh multipurpose vehicles are sold in India every year and the segment is likely to grow in double digits with new entrants like Honda Mobilio and Renault Lodgy, which is lined up for launch next year.
Isuzu's MPV is likely to join the league of new multipurpose vehicles that are slated to hit the Indian roads at around that time. Toyota will be ready with its new generation Innova based on a global 640 A platform while Mahindra & Mahindra's all new Xylo-U421 developed out of the company's North American Technical Centre will be in the final stages of development. A few other compact MPVs from Hyundai Motor India and M&M stables are also expected.
Before Isuzu's locally produced models from its own manufacturing plant hit the market, the automaker has tied up with CK Birla Group's Hindustan Motors plant in Chennai to assemble its premium SUV MU-7 and D-MAX pickup truck.
The company is working overtime to put in place its vendor base and has hired services of Tata Consultancy Services to identify quality suppliers.
Kikuchi says the company plans to step up localisation to 80% in the next two years and is in the process of selecting the best suppliers in India. It is also gradually building its dealer network that is expected to grow to 60 dealers in the country by the time the new products are rolled out.
Isuzu is betting big on the pickup truck segment. Kikuchi believes India will be the largest pickup truck market in the world by 2023, with sales multiplying four times from now to touch to almost eight lakh units annually.
Ammar Master, manager at LMC Automotive, Thailand who tracks South East Asian markets says Isuzu is the sixth largest light vehicle seller in ASEAN region, with a market share of 6% in the first half of this year. Thailand is its biggest market, accounting for 80% of its sales in the region. It is the second largest player in the pickup truck segment in Thailand, with a market share of 36% on sales of 66,000 units between January and June, behind Toyota's 39% market share with sales of 72,000 units.
"In India, the biggest challenge for Isuzu will be to build its brand and fight a respectable battle against the home-grown players, M&M and Tata. This is not going to be easy and will take time, given the fact that buyers in India have newly been introduced to the Isuzu brand and its D-Max," said Master.
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