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Suzuki, Toshiba and Denso to form JV to produce automotive Li-ion battery packs in India

14 April 2017

Suzuki Motor Corporation, Toshiba Corporation, and Denso Corporation have reached basic agreement on establishing a joint venture company for production of automotive lithium-ion battery packs in India, and signed the agreement. The initial capital expenditure will be ¥20 billion (US$184 million). The joint venture company will be capitalized at ¥2 billion (US$18.4 million), with the planned participation ratio of Suzuki 50%, Toshiba 40% and Denso 10% respectively.

The battery pack manufacturing joint venture by the three companies will provide a stable supply of lithium-ion battery packs in India. The joint venture company will be established within 2017 and will move to manufacturing phase at earliest possible timing.

In India, higher attention is being paid to environment, with new Bharat Stage (BS) VI emission standards for light- and heavy-duty vehicles, as well as two- and three-wheeled vehicles, to go into effect in 2020.

BS VI essentially brings Indian motor vehicle regulations into alignment with European Union regulations, with the exception of the norms for three-wheelers, which are not yet at European levels.

Frost & Sullivan noted that the Indian automotive industry’s movement towards Bharat Stage (BS) VI compliance will have far-reaching implications for original equipment manufacturers (OEMs), especially in the diesel engine segment. With regulations governing diesel engines expected to become tighter, the cost of compliance will be up to $1,200 for diesel cars.

Frost & Sullivan suggested that the mild hybrid electric vehicle (MHEV), with its exceptional cost advantage, could be a solution, and forecast that by helping diesel engines balance cost efficiency and BS VI compliance, this powertrain segment could well capture almost 18% of the total market in 2023.

However, the Government of India (GoI) recently decided to exclude mild hybrids from its scheme for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME). Frost & Sullivan does not see this as a problem.

Various OEMs, especially Maruti Suzuki and Mahindra & Mahindra, are intensifying focus on MHEVs due to their ability to improve fuel efficiency and make the cars more economical to own over the course of its ownership. For instance, the new Ertiga from Maruti Suzuki that features SHVS technology pushes up its fuel efficiency from about 20.8 Km/L to 24.5 Km/L. The recent withdrawal of incentives under FAME (Faster Adoption and Manufacturing of Electric Vehicles) is not expected to have a significant impact in the sales of mild hybrid vehicles as it comes with a strong cost of ownership advantage that renders the incentive relatively insignificant.

For the same reason, several OEMs are already deciding on the electrification strategies to create the right hybrid product mix for India. Full hybrids also will find sizeable uptake in the long term after a slow start.

—Sudeep Kaippalli, Industry Analyst, Mobility Practice, Frost & Sullivan

April 14, 2017 in Batteries, Hybrids, India, Regulations | Permalink | Comments (2)

Comments

it's very exciting and desirable car but I can't believe the price of the car. does it worth it?

lenovo Support

the great move was taken by 3 companies together.
one day these Chinese companies will grab most of the market. no wonder, they have reasons.
ipod Support Number

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