INDIA BUSINESS WORLD - JANUARY 1^st - JANUARY 15^th - 2008

SUZUKI, ADANIS TIE UP FOR FIRST CARS-ONLY TERMINAL

The country's first dedicated car export terminal will come up at Mundra Port in Gujarat. Japanese automobile giant Suzuki has joined hands with Adani group-owned Mundra Port and Special Economic Zone (MPSEZ) to beef up its car exports from India.

Maruti Suzuki India, the Indian subsidiary of Suzuki, which currently exports around 40,000 cars from India (mostly through Jawaharlal Nehru Port at Nhava Sheva), wants to enhance exports five-fold to 200,000 in two years. A majority of this will be through Mundra.

Details of the deal were being worked out, sources said. When contacted, Rajeeva Sinha, director (MPSEZ), confirmed the development. "Our plan is to create a mega car terminal that could be used as a multi-user facility in the future. We will provide 50 acres for car storage and cars will be guided onto car carriers without the help of drivers," said Mr. Sinha.

Exports of cars would begin soon from one of the existing berths temporarily and they would eventually build a dedicated car terminal at the port, he added.

A few months ago, a team from Maruti Suzuki India, led by senior joint managing director Tsuneo Kobayashi , had visited Mundra Port. Mundra, a deep-water port close to Suzuki's production centres near Delhi (at Gurgaon and Manesar), has turned out to be the best option for the company.

Maruti Suzuki is one of the top Indian exporters of cars, and has plans to enhance exports. Its Maruti-800, Alto and Swift brands are big hits in South Africa and Europe.

Earlier, Maruti Suzuki India and Nissan Motor Company had jointly looked at setting up a greenfield port in Gujarat, which was to have an exclusive car terminal, along with other infrastructure such as sheds for cars to accumulate and a paint shop for touch-up jobs. However, the plan fell out of favour because of the huge capital expenditure required and a long break-even period.

Shipping secretary AK Mahapatra had said that Maruti and Nissan already visited non-major and major ports of Gujarat. "The dedicated port would have been able to handle 400,000 cars annually but the two companies may have had to incur capital expenditure of Rs 3,000 crore," he said.

"The initial expenses and continuous dredging, along with the maintenance of the port premises, would have led to huge capital expenditure, making the project financially unviable," said an industry official. There are no dedicated car terminals in India so far, despite the fact that the country is growing into a global manufacturing hub for mini cars, with foreign auto giants scrambling for fresh capacities in the country. Currently, Mumbai and Chennai are the only two major ports that handle auto exports.

Apart from Suzuki and Nissan, Mitsubishi Motors is another global major searching for port facilities in the country. Its officials had visited Vansi Borsi Port and Maroli Port in Gujarat for setting up another exclusive car handling terminal. Mitsubishi has also been exploring options for setting up exclusive terminals at existing ports such as Mundra, Pipavav, Okha or Kandla. Its plan is that the proposed terminal could be linked to the north-south dedicated rail freight corridor, to facilitate movement of cars by rail.