Suzuki starts US$40 million India fund to help rural startups

AUTOMAKER Suzuki Motor has launched a US$40 million fund in India to invest in small rural businesses, as the Japanese company aims to improve its presence in one of the world’s fastest-growing markets.

Through the fund – called Next Bharat Venture – Suzuki will invest in startups related to agriculture and microfinance, the company said on Thursday (Jul 4). It also added that training for farmers is also in the works.

Suzuki, through Maruti Suzuki India, is India’s biggest automaker with a 41.6 per cent market share. However, it risks losing customers due to its paltry line up of hybrid cars and lack of electrified options.

The company already has access to around 400 million people in India via its thousands of showrooms and service centres but Suzuki hopes the fund will help it reach an even wider audience, executive vice president Naomi Ishii said. 

“Our concern was how to access the remaining 10 billion and contribute to them,” Ishii added.

The move also comes as the Japanese automaker ventures into new areas such as biogas in India, with a plant starting operations in June.

It hopes that the fund targeting small, village-based entrepreneurs will help create business opportunities among underserved areas to bolster its appeal beyond its existing clientele. 

“It’s an investment for the long run,” he said. Ishii, who was previously based in India and managed Toyota Motor’s local unit, said that establishing a network of entrepreneurs in the country will be “an enormous asset” for the company.

The new fund will operate out of three offices based in Gujarat, Bangalore and Hyderabad. It will be led by Vipul Nath Jindal, a graduate of the Indian Institute of Technology in Hyderabad. 

SEE ALSO

Hyundai Motor shares hit record high as investors bet on India IPO

The school is also the site of the Suzuki Innovation Center, which promotes interactions between the Japanese and Indian business community. The centre will now be run as part of the fund.

Suzuki has been running technology and non-technology related initiatives through the centre to improve its understanding of remote areas in parts of India and find new sectors to delve into, Ishii said.

New businesses may “come out of the latest venture initiative” for the company, he added.

Suzuki, which mainly makes small, compact internal combustion engine cars, has been in the car business in India since 1982 but is facing renewed competition from both local and foreign automakers with better hybrid and electric offerings. BLOOMBERG