Suzuki to invest up to $70 mln in Hungary

Hirotaka Ono, board member in charge of overseas marketing, said Suzuki aimed to boost its production capacity at the plant to 300,000 units a year by 2008 from the current 170,000 units, which means expanding output by 76%. This would cost Suzuki $44 million-$70 million. Suzuki was advertising 800 jobs in full-page newspaper ads in Hungary this month, and it is looking to add a total 1,000 jobs to bring annual capacity to 220,000 units by January 2007. The factory currently employs 2,500 people. Ono said Suzuki had never imagined it would need this much capacity so soon. Suzuki's sales of its strategic models (Swift and Escudo) have been outstanding since their launch in the past two years, and the company is now struggling to keep up with orders for a third global car, the SX4 crossover, introduced first in Europe this March. With demand far outpacing expectations, Suzuki said it now plans to sell 60,000 SX4s in Europe this year instead of 40,000. Italy's Fiat, which co-developed the Suzuki-built compact crossover and sells it as the Fiat Sedici, also has a backlog of orders stretching to five months, a Suzuki executive told a news conference in Tokyo to launch the SX4 in Japan. Fiat's sales target has also been lifted, to 30,000 units from 20,000, requiring more capacity at the Magyar Suzuki plant in Hungary. "We're asking for more exports from Japan, but the domestic factory is also at full capacity due to strong sales of the Swift, so production is extremely tight," Reuters cited Ono as saying. (Portfolio, Bloomberg)