Demand For Fuel-Efficient Cars Has Suzuki Expanding In Japan

Facility will meet demand for fuel-efficient small cars; produce 240,000 vehicles a year.

TOKYO (AP) – Suzuki Motor Corp. said Wednesday it will build a new factory in Japan for $521 million and expand production overseas to meet growing demand for fuel-efficient small cars amid soaring global gasoline prices.

In addition to Suzuki's ramped up production plans, the company also raised its sales forecast to $26.1 billion for the current business year through March 2007.

The move comes as the company taps surging demand for gas-sipping mini cars, which have engines of up to 0.66 liters. Demand is being fueled not only by high gasoline prices but Suzuki's deepening alliance with Nissan Motor Co. following the loosening of ties with troubled General Motors Corp. earlier this year.

The new plant will be built in the central prefecture of Shizuoka and start operations in late 2008. It will produce 240,000 vehicles a year, and bring Suzuki's worldwide output to 3 million vehicles in 2009, the Japanese automaker said in a release.

Under its partnership with Nissan, Suzuki supplies its bigger Tokyo-based rival with mini-cars, which are not made by Nissan but in hot demand in Japan because they get tax breaks. The small cars are increasingly popular overseas because of the gas crunch.

The company also said it will boost production at facilities in Hungary, India and Pakistan.

Output at the Hungary plant will rise to 300,000 units a year by 2008, from 160,000 now, while production in India is seen climbing to 960,000 vehicles by 2009, from 630,000. In Pakistan, Suzuki plans to raise output to 170,000 units by 2009, from 110,000 today.

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