AP gets Rs 1,500 cr LCV plant

Japan's Isuzu Motors inks pact with AP govt on Friday to set up 120,000 units a year manufacturing facility at Sri City Hyderabad: Finally, Lady Luck has smiled on Andhra Pradesh. The State, which has been trying hard for major automobile plant since two decades, got its first breakthrough on Friday when Japan's Isuzu Motors inked a pact with it to set up Rs 1,500-crore manufacturing facility at Sri City in Chittoor district. The plant, which will be established on a 100-acre plot at the Sri City special economic zone, will produce light commercial vehicles (LCVs) as well as sports utility vehicles (SUVs). "We will invest Rs 1,500 crore in the plant over the next five to seven years and it will have a total installed capacity of 1.2 lakh units. The first phase of the development will begin operations with initial capacity of 50,000 units by the end of 2015 or early 2016," Shigeru Wakabayashi, Deputy Managing Director, Isuzu Motors India Pvt Ltd, told reporters after signing the agreement. Isuzu also signed a Memorandum of Understanding (MoU) with Sri City immediately after its agreement with the government. Promoted by Ravindra Sannareddy, Sri City, one of the successful SEZs in the country, is home to over 100 companies now, but Isuzu is the biggest investor that has come its way. Its close proximity to Chennai (just 50 km) has tilted scales in its favour. The State government has also played its part by offering tax incentives and other sops. "We are confident that Isuzu plant will spur other leading manufacturers as well as auto component manufacturers to set up their bases in Sri City. The plant will generate more employment opportunities and bring huge investments to the hitherto backward Satyavedu region of Chittoor district," said Sannareddy Initially, the automaker will make pick-ups and SUVs at the plant. "We will focus on domestic market first where we want to sell 80,000 units out of 1.2 lakh units we plan to produce in the plant. The remaining will be for exports," Wakabayashi explained, adding that the company would also introduce other products. Replying to a query on whether it would manufacture diesel engines at the plant, he said there was a possibility to do so. "In the long term there is a possibility as the Indian market is going to grow substantially but at the moment we don't have any such plans," he maintained. Chief Minister N Kiran Kumar Reddy who was presented at the MoU signing ceremony had also unveiled two models - Isuzu MU7 SUV and D-Max pick-up range. Imported from Thailand, the SUV is priced at Rs 23.75 lakh while the pick-up range priced from Rs 6.87 lakh to Rs 8.09 lakh. However, the automaker is trying to assemble these products at an auto plant owned by another automaker till its plant was ready. ""Till the time we are ready with our plant, we have decided to go for contract assembly and we are talking to a few companies in India. Within this year we will finalise an assembly partnership," Wakabayashi said without disclosing more details. At present, the company has its dealerships at Hyderabad and Coimbatore.