MSIL aims to scale down royalty to Suzuki as more co-developed models get launched

Maruti Suzuki expects that its royalty payments to parent company Suzuki will reduce as more and more co-developed model hit the market. The first model that is expected to follow this trend is a compact SUV which is expected to be based on the XA-Alpha concept. 

The Indo-Japanese automaker is investing Rs 2000 crore on an R&D facility including a test track in Rohtak which is not far from Manesar where it has its oldest manufacturing plant. The company has begun partial operations at the facility. 

The report adds a statement from Ajay Seth, which says that when there is joint development there will be equal apportionment based on the amount of contribution. However, core products like platforms and powertrain would continue to come mainly from Japan. He added that as Maruti Suzuki grew in the future, it will participate in more joint development activities.  

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Source:ET