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<keyword id="100743" type="COMPANY" weightage="80" keywordseo="Suzuki-Motor-Corporation">Suzuki Motor Corporation</keyword>'s 85-year-old CEO <keyword id="130099" type="PERSON" weightage="80" keywordseo="Osamu-Suzuki">Osamu Suzuki</keyword> named his eldest son <keyword id="392681" type="PERSON" weightage="80" keywordseo="Toshihiro-Suzuki">Toshihiro Suzuki</keyword> as the new <keyword id="2540" type="POSITION" weightage="60" keywordseo="President">president</keyword> of <keyword id="6355311" type="COUNTRY" weightage="60" keywordseo="Japan">Japan</keyword>'s fourth-biggest car maker, easing investor concerns over the company's succession plan and boosting its shares. Toshihiro took over the role from his father as president and chief operating officer on Tuesday. Osamu Suzuki remains the <keyword id="150485" type="POSITION" weightage="60" keywordseo="CEO-and-Chairman">CEO and chairman</keyword> of the company, reported the Economic Times. 

	The company also announced its new mid-term plan, where it gave a heavy weight to its Indian subsidiary in its future growth prospects.
 Suzuki said it will try to achieve 3.4 million vehicles sales by the end of the decade aiming to grow at a <keyword id="107168" type="ORGANIZATION" weightage="80" keywordseo="CAGR">CAGR</keyword> of 3% by 2020. Asia is expected to contribute over 64% (2.2 million) of its global volumes by then and India will contribute a lion's share of 58% or 2 million annual sales volumes by then. 

	India contributed around 43% of Suzuki's global sales and 30% of its consolidated profits in FY-15. 
 The Japanese automaker said it expects the passenger vehicle market in India to grow at a compounded rate of 11% for the next five years to 5 million units and become the third largest passenger vehicle market globally by 2020 and Suzuki expects Indian base to retain its high 45% <keyword id="34527" type="UNKNOWN" weightage="80" keywordseo="market-share">market share</keyword>, despite stiff competition. K Ayukawa, MD &amp; CEO, Maruti Suzuki India Limited told ET: "The SMC medium term plan puts high focus on India, which is very positive. Mr T Suzuki has been a <keyword id="151565" type="POSITION" weightage="80" keywordseo="board-member">board member</keyword> of <keyword id="244571" type="COMPANY" weightage="80" keywordseo="MSIL">MSIL</keyword> since October 2013 and has a very good understanding of our business. Overall, SMC's commitment to India remains unchanged". 

	The local Indian subsidiary will not only act as a key production base, but its Japanese parent wants the India operations to globalise the brand further by exporting to newer markets. 
 

	Suzuki Motor Corporation said it will launch 20 new products in the coming five years which may also include full model changes of existing cars and it wants to make India a long term development base by co-developing more with Indian engineers. 
	 
	(Image: Reuters)

Suzuki Motor heir takes over as the new president

<a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi" target="_BLANK￿￿￿￿">Prime Minister Narendra Modi</a> is talking about ‘<a href="http://www.businessinsider.in/searchresult.cms?query=make+in+india" target="_BLANK￿￿￿￿">Make in India</a>’ initiative and taking it to various places, inviting business honchos to <a href="http://www.businessinsider.in/This-is-how-China-is-helping-India-become-a-global-manufacturing-hub/articleshow/46715144.cms" target="_BLANK￿￿￿￿">manufacture in India</a>. But what about quality? Is it quantity vs quality? 
 
Well, <a href="http://www.businessinsider.in/Suzuki-could-soon-have-its-own-car-manufacturing-unit-in-Gujarat-independent-of-Maruti-Know-how/articleshow/47305927.cms" target="_BLANK￿￿￿￿">Suzuki Motor Corporation</a> Chairman and CEO <keyword id="130099" type="PERSON" weightage="100" keywordseo="Osamu-Suzuki">Osamu Suzuki</keyword> stressed on it too. 
 
While addressing the annual session of ACMA in New Delhi, Suzuki stressed that India should ensure quality too, especially in auto components, if it aims to become world’s manufacturing hub. 
 "I believe if all suppliers follow ‘<keyword id="3034530" type="UNKNOWN" weightage="100" keywordseo="Quality-in-India">Quality in India</keyword>’, then they will be able to overcome the US and China and they can acquire the number one position in global market,” he said. 
 
Suzuki said the global <a href="http://www.businessinsider.in/searchresult.cms?query=recall+vehicles" target="_BLANK￿￿￿￿">recall</a> of more than one million units of vehicles has put the focus on quality. 
 
“It doesn't leave any doubt that quality is an important key to success and in this regard everyone must have noticed that in today's situation vendor selection on basis of quality is inevitable,” he added. 
 
Suzuki also urged <a href="http://www.businessinsider.in/searchresult.cms?query=auto+market" target="_BLANK￿￿￿￿">auto</a> component makers to reinvest profits in their business, asking them not to divert profits in investing in hotels or leisure. “This is going to be the key point, the most critical point whether you are going to acquire top position in global market or not. Plant one to set up plant two and so on,” he said.

Osamu Suzuki talks about elephant in the room, says ensure quality too in Modi’s Make in India

After nearly two years of its announcement, Indian carmaker <keyword id="44883" type="CITY" weightage="20" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword> has started the construction of its Gujarat manufacturing unit. The company plans to operate its Gujarat plant in sync with Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s ‘<keyword id="6354869" type="UNKNOWN" weightage="20" keywordseo="make-in-India">Make in India</keyword>’ campaign. The Delhi-headquartered firm laid the foundation of the plant on January 28, 2015. 
	 “For the Suzuki group, setting up of this new manufacturing facility in Gujarat is the start of a new era. Under the ‘Make in India’ program proposed by the PM Modi, we will set up a state-of-the-art production plant in Gujarat here, with high focus on productivity and efficiency,” said <keyword id="130099" type="PERSON" weightage="20" keywordseo="Osamu-Suzuki">Osamu Suzuki</keyword>, chairman of Suzuki Motor Corporation Ltd. 
	 
	Suzuki further said that the commencement of this manufacturing unit will further boost the Indo-Japan ties. “Thanks to this project, many more Japanese people will travel to Gujarat. Let us deepen friendship and mutual understanding between India and Japan,” he added . 
	 
	The unit is spread over 640 acres and will have an integrated suppliers’ park. The plant, which will be constructed in three phases, has an overall capacity of manufacturing 7,50,000 units. The company has invested nearly Rs 3,000 crore in its first plant and it is expected to be operational by mid-2017. It will roll out 2,50,000 units on its commencement. 
	 
	Representational Image

Maruti’s Gujarat Manufacturing Unit In Line With Make In India Campaign:
Osamu

<ul><li>Maruti’s brand, scale, and reach can be a big boost for electric vehicles in India </li><li>Other leaders in the segment, Mahindra &amp; Mahindra and Tata, had already introduced their EV models in the Indian market </li><li>In India, the sale of electric cars has been sluggish with sales dipping in FY 2017-18 </li></ul>Indian automobile giants have forayed into the electric vehicle market with Mahindra &amp; Mahindra taking the lead and acquiring Reva <keyword id="46640" type="ORGANIZATION" weightage="20" keywordseo="electric-car">Electric Car</keyword> Company in 2011. But it’s only now that the country’s largest carmaker looking to throw in its hat into the ring. <keyword id="44883" type="DOMAIN" weightage="20" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword> is <a href="https://www.news18.com/news/auto/exclusive-electric-maruti-suzuki-wagon-r-spotted-testing-ahead-of-launch-next-year-1996651.html">reportedly</a> testing the electric version of the good ol’ Wagon R on the Indian roads, although the car will be officially launched in 2020. The launch of Maruti’s electric car will be significant because of the scale that the company brings to the table. Maruti Suzuki saw a domestic sale of 1.3 million until December, 2018 and has over 2000 sales outlets spread across the length and breadth of the country. The brand, with a history of over 37 years in India, has proved that it still has resonance amongst millions of Indians despite the entry of fancy foreign peers. “They might not have the first mover advantage, but the expertise they have is unmatched. Not just distribution, they have a great hold over their brand loyalty and customer development channels, which is also their USP,” said Pranav Jain, an automobile consultant. The pioneer in the segment has been Mahindra &amp; Mahindra with cars like e20, eVerito and eSupro already being commercially sold, while other rivals like Tata finding a foothold in the market with cars like Tata Tigor EV. However, access to these vehicles, recharging stations, and service centres after purchase are crucial factors in the consumers’ decision to purchase. Maruti is a better pick based on these factors than other players because of its existing network in the country. However, the company has taken its time to join the race. Osamu Suzuki, Chairman, Suzuki Motor corporation, during his visit to India for the <a href="https://www.firstpost.com/business/global-mobility-summit-suzuki-motor-corp-to-start-road-test-of-electric-vehicles-next-month-says-chairman-5136281.html">Global Mobility Summit</a> in September had announced that the company will launch 50 EV prototype vehicles in India. The idea behind the testing is to develop safe and easy-to-use EVs for the Indian roads. The Indian Electric Vehicle market saw a growth of 124 per cent with 56,000 units sold in fiscal year 2017-18, but they hold a <a href="https://www.livemint.com/Politics/1x96WeyG6cCVnm5zPcUraK/Govt-proposes-incentives-to-boost-EVsalesin5-years.html">mere 1% </a>of total vehicles sold in India. However, the major share was held by electric two-wheelers with 54,800 units sold reportedly. The sales of electric cars took a mere 1200 units, according to a report done by <a href="https://auto.ndtv.com/news/electric-car-sales-in-india-fall-in-fy18-electric-two-wheelers-record-healthy-growth-1934323">the Society of Manufacturers of Electric Vehicles. </a> Currently, the electric vehicles market in India faces a massive infrastructural problem due to the lack of charging stations (albeit they are slowly coming up in major cities like Bengaluru and Delhi). The government’s delay in bringing about an EV policy too has the industry in a fix. While the entry of big players will give the right impetus to a new generation of cars, the industry will also need a proactive solution from the centre. See Also: <a href="https://www.businessinsider.in/central-govt-has-set-up-a-panel-to-monitor-indigenous-electric-vehicles/articleshow/53595564.cms">Central govt has set up a panel to monitor indigenous electric vehicles</a> <a href="https://www.businessinsider.in/electric-two-wheelers-might-cost-us-less-in-the-near-future/articleshow/53189329.cms">Electric two-wheelers might cost us less in the near future</a> <a href="https://www.businessinsider.in/elon-musk-plans-on-tesla-motors-having-partial-presence-in-india-by-2019/articleshow/66508511.cms">Elon Musk plans on Tesla Motors having ‘partial presence’ in India by 2019</a>

Can latecomer Maruti Suzuki rev up electric car sales in India?

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">REUTERS/Paulo Whitaker A Toyota concept car.</div></div></div>Toyota and and Suzuki are talking about an alliance, and the initial response, <a href="http://www.bloomberg.com/news/articles/2016-10-12/toyota-explores-research-and-development-partnership-with-suzuki">according to Bloomberg's Craig Trudell, Yuki Hagiwara, and Jie Ma</a>, is dubious."In exploring collaboration between Toyota and Suzuki Motor Corp., chieftains Akio Toyoda and Osamu Suzuki seek to tie together companies with a history of failed alliances," they wrote.A Toyota-Suzuki marriage would be quite the family business, obviously. Bloomberg focuses on the R&amp;D benefits that Suzuki would reap, but there's a chance that Toyota wants a tie-up because of it's struggles in China - and Suzuki's strength in India."What Suzuki brings to the table is a leading position in India," Bloomberg noted. "Its Maruti Suzuki India Ltd. unit has long dominated the market with inexpensive cars like the Alto and Swift. Though Toyota has introduced budget models such as the Etios compact, its market share remains well behind the 47 percent<a href="https://marutistoragenew.blob.core.windows.net/msilintiwebpdf/Transcription_of_Maruti_Suzuki-26th_April_2016.pdf" target="_blank" title="Maruti earnings call transcript" data-tracker-action="click" data-tracker-category="nav" data-tracker-label="inline_link.02"> </a>reached by Maruti Suzuki last fiscal year."India is Suzuki's bright spot. The automaker left the US car market in 2012, as its lineup of vehicles had captured negligible market share. But it's expertise in small cars has yielded tremendous success in India, a growth market that if often overshadowed by China.<div class="KonaFilter image-container display-table"><div><div class="image on-image">Thomson ReutersLogo of Suzuki Motors is displayed at the 44th Tokyo Motor Show in Tokyo, Japan</div></div></div>Toyota's position in China, already the world's largest market, is weak compared with automakers such as Volkswagen and General Motors, which combined hold about 30% share in the Middle Kingdom, thought joint-ventures with Chinese carmakers. Toyota only has around 5%.That's a gigantic amount of ground to make up, so Toyota could be looking at Suzuki as a key way to get in on that nearly 50% share in India - especially given that Toyota holds only about 5% of that market, as well.The problem with very weak market share is that it's difficult to turn the situation around. Volkswagen has this problem in the US, where it's share is meager relative to its global rivals. Ford got a late start in China and has been gaining, but it's going to take a while before it's truly competitive with GM and VW.Suzuki smaller, cheaper strategy has been a perfect fit for India. Now Toyota may see that market as a better place to invest resources than continuing to struggle in China. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/toyota-kirobo-mini-robot-baby-lonely-people-2016-10"> Toyota created a $392 baby robot to help comfort people in Japan without children</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="prMDU5NjE6QjL0MpK1cAq1fKAv4bqry5" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Toyota's potential partnership with Suzuki highlights problems in China

Global automakers are eyeing <a href="http://www.businessinsider.in/searchresult.cms?query=indian+auto+market&amp;sortorder=effectivedate">Indian auto market</a> life never before. The country is becoming a hotspot for auto majors such as <a href="http://www.businessinsider.in/searchresult.cms?query=toyota&amp;sortorder=effectivedate">Toyota</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=hyundai&amp;sortorder=effectivedate">Hyundai</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=volkswagen&amp;sortorder=effectivedate">Volkswagen</a>, etc who want to increase their investments and operations in India. 
 
The interest of these global auto companies can be assessed as they are lining up to meet Indian <a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi&amp;sortorder=effectivedate">Prime Minister Narendra Modi.</a> Latest was when Toyota Motor president Akio Toyoda and <keyword id="111052" type="CITY" weightage="20" keywordseo="Suzuki-Motor">Suzuki Motor</keyword> chairman Osamu Suzuki met Modi. 
 Even world's largest automotive group <keyword id="6361865" type="CITY" weightage="20" keywordseo="Volkswagen">Volkswagen</keyword> is exploring a partnership with India's largest automobile company by revenue, <keyword id="42747" type="CITY" weightage="20" keywordseo="Tata-Motors">Tata Motors</keyword>. 
 The likes of Kia, PSA, SAIC and others are also queuing up. <keyword id="44883" type="CITY" weightage="20" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword> accounts for half the Indian market while Toyota's Innova and Fortuner head their respective segments. 
 “India is critical for the Japanese parent with 50% of global sales coming from the country. So whatever technology it gets from Toyota will surely be deployed in India,” Maruti Suzuki chairman <keyword id="33298" type="COMPANY" weightage="20" keywordseo="RC-Bhargava">RC Bhargava</keyword> told ET, adding “Nobody wants to miss the opportunity and the size. They don't see the kind of potential growth in any other market like in India. It's just not the growth rate, but the base is also very high.” 
 When Bernhard Maier took over as Skoda Auto's global CEO, he visited India soon after taking over. <keyword id="4581" type="CITY" weightage="20" keywordseo="general-motors">General Motors</keyword> CEO Mary Barra has visited twice in less than a year. Ford Motor executive chairman Bill Ford visited India last year to inaugurate the New Product Development Centre that will create the foundation for India products. 
 <keyword id="596" type="CITY" weightage="100" keywordseo="Hyundai">Hyundai</keyword> Motor chairman Chung Mong-Koo is also expected to visit soon to announce the launch of the Kia brand in India. Carlos Ghosn, global CEO of the Renault-Nissan Alliance and a frequent visitor, told ET he has always been bullish on the Indian market. 
With the passenger vehicle market set to cross the 3 million mark by the end of 2017, India is seen as a future growth centre by all manufacturers.

India is becoming a hot auto market; Toyota, Volkswagen, Hyundai, etc are looking to zoom operations

<keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">Finance</keyword> Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> arrived here today on a six-day visit during which he will meet Japanese Prime Minister <keyword id="590894" type="PERSON" weightage="100" keywordseo="Shinzo-Abe">Shinzo Abe</keyword> as well as several key investors to sell the India growth story. During his visit, he will meet <keyword id="163404" type="COMPANY" weightage="20" keywordseo="Softbank">SoftBank</keyword> CEO <keyword id="357983" type="PERSON" weightage="20" keywordseo="Masayoshi-Son">Masayoshi Son</keyword> to discuss investment opportunities India presents to the Japanese telecom giant. SoftBank has already made a string of tech investments in India and has announced plans for raising it to USD 10 billion over the next decade. Jaitley will also meet Osamu <keyword id="6911" type="CITY" weightage="20" keywordseo="suzuki">Suzuki</keyword>, Chairman of <keyword id="111052" type="CITY" weightage="20" keywordseo="Suzuki-Motor">Suzuki Motor</keyword>, the biggest Japanese investor in automobile sector in India. 

	Meeting with Abe is planned for tomorrow when he will also attend the 22nd International Conference on 'The Future of Asia' organised by Nikkei Inc. 
 

	On May 31, he would participate in 'The Future of Asia' conference and in the afternoon he will deliver keynote address at the roundtable on National Investment &amp; Infrastructure Fund (NIIF). 
 

	The government is looking at attracting investors to the Rs 40,000-crore NIIF, which is an investment vehicle for funding commercially viable greenfield, brown-field and stalled projects. It will have 49 per cent holding in NIIF and the rest will be of private investors. 
 

	In the evening Jaitley will have meetings with Government Pension Investment Fund (GPIF) President Norihiro Takahashi and Japan Overseas Infrastructure Investment Cooperation for Transport and Urban Development (JOIN) .. 
 

	He will also meet CEOs at a meeting organised by the Japan-India Business Cooperation Committee next day and address the Institute For International Economic Studies (IIES) Symposium on Indian economy. 
 

	Besides, meetings with Japan International Cooperation Agency (JICA) President Shinichi Kitaoka and Hitachi Chairamn Hiroaki Nakanishi are also planned. 
 

	Jaitley will leave for Osaka on June 1 evening and the next day deliver a Lecture on 'India: Political, Social and Economic Change' at Osaka University. 
 

	Later in the evening, the minister will participate and address the Make in India Investment Promotion Seminar and meet select Japanese CEOs and CII delegation. 
 

	The CII CEO delegation includes senior industry leaders like Naushad Forbes, President, CII and Co-Chairman, Forbes Marshall Pvt Ltd, Punj Llyod Chairman Atul Punj, Bharat Forge executive director Amit B Kalyani, DCM Chairman and Managing Director Ajay S Shriram and Wipro's Japan head Naohide Takatani. 
 

	On June 3, Jaitley will return to Tokyo for more meetings including with officials of Sumitomo Mitsui Banking Corp and Eastspring Investments.

Arun Jaitley arrives in Japan; to meet PM Shinzo Abe, industry leaders

NEW DELHI: <keyword id="44883" type="CITY" weightage="20" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword> India Ltd (MSIL) has appointed two local investment bankers — Kotak Mahindra Capital and Axis Capital — as the company seeks to persuade minority investors to back a controversial plan that calls for the carmaker's proposed Gujarat factory to be set up by parent <keyword id="200508" type="COMPANY" weightage="20" keywordseo="Suzuki-Motor-Corp-">Suzuki Motor Corp.</keyword> 
 Maruti <keyword id="6911" type="CITY" weightage="20" keywordseo="suzuki">Suzuki</keyword>'s manufacturing will be contracted to the plant in a practice that some experts say is unusual for the industry. The move has been opposed by some shareholders who believe it will undermine the Indian unit and divert income to the parent. 
 
Maruti Suzuki is seeking minority shareholder approval under Section 188 of the Companies Act for the special resolution related to the plan. It needs the support of at least three-fourths of its public shareholders to get the proposal passed, which in effect means a bloc with an 11% stake can block the resolution. 
 <keyword id="111052" type="CITY" weightage="20" keywordseo="Suzuki-Motor">Suzuki Motor</keyword> owns a 56.21% stake in MSIL, with the rest being held by the public. The investment bankers won't have any role in trying to sway investors, a Maruti Suzuki spokesperson said by email. They "have not been appointed to convince the institutional investors — domestic or foreign — to vote in favour of the Gujarat project structure," he said. That's being done by a Maruti Suzuki team led by chairman RC Bhargava and managing director and CEO Kenichi Ayukawa, he said. 
 
"The investment bankers are required to identify the investors in various parts of the world, arrange the meetings with them and the necessary logistical support. They are also involved in discussions with MSIL in finalizing the presentations and strategy for the discussions," he said. 
 
The margin of victory needed to get the plan approved came in for some questioning. "The new law requires that the proposal be passed by a special resolution. It is not clear why 26% of minority shareholders should be able to override 74% of minority shareholders in a vote where the promoter is not voting," the spokesperson said. 
 
After strong concerns were raised by domestic institutional investors over the issue, all eyes are now on Life Insurance Corp. (LIC) of India that owns a 6.63% stake in Maruti Suzuki. Domestic mutual funds, which together own a 6.16% stake in Maruti Suzuki, have already opposed the plan. 
 
In case LIC joins hands with them, the combined holding of those against the move would cross 12%, enough to block the resolution. "Given the stance taken by LIC in the case of Cairn India depositing $1.25 billion (Rs 7,500 crore) with its parent Sesa Sterlite, there is all likelihood that the largest Indian institutional investor is likely to oppose the proposal," said the head of one of the mutual funds. 
 
Maruti Suzuki pointed out that the objections by the domestic funds predate changes to the plan. "The letter was written before the March modifications to the original structure," the spokesperson said. "After the March modifications, no one has written to us conveying any concerns about the proposal." 
 
A senior LIC official, who didn't want to be named, said, "LIC has always worked to protect the interests of investors and this case will not be any different." Some believe the state-owned insurer may not oppose the plan. "The feedback we have received that it would support the proposed structure," said another mutual fund head. 
 Incidentally, Suzuki Motor chairman Osamu Suzuki met Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> last week. Mutual fund representatives said the appointment of investment bankers is also aimed at gauging the pulse of investors. In case they're not able to convince more than three-fourths of public shareholders, Maruti Suzuki may revisit its plan to seek shareholder approval. 
 
The next annual general meeting is set for September 4, but the proposal is not on the agenda. "We would not be ready for the vote on this matter by September 4, as we would not have completed our meetings with all investors in India and abroad," said the spokesperson. 
 
The resolution will be taken up at a later time. "The company plans to have a separate shareholders' meeting sometime later this year, which will be contingent upon the ongoing exercise to bring large investors on its side," said a fund manager. 
 
If the Maruti Suzuki plan goes ahead, it could set a precedent. Many promoters of listed companies would prefer to follow the same route that will result in destroying shareholder value, said a senior executive at an insurance company. 
 
"This opens up the door to every single promoter converting their listed company into a marketing arm. Will they now set up manufacturing outfits as 100% owned entities that sell through the listed company?" said Amit Tandon, CEO of Institutional Investor Advisory Services. "On what basis will companies be valued? And where does this end?" 
 
In March, a group of 19 leading domestic institutional investors that includes HDFC Mutual Fund, Birla Sun Life, ICICI Prudential, Reliance Mutual Fund, UTI SBI Mutual Fund and Axis Bank Mutual Fund among others wrote to Maruti Suzuki raising serious concern over the transaction. 
 
"As a policy, we don't comment on market rumours or speculations, hence we would not like to comment on this," said an Axis Bank official. Kotak did not reply to ET's queries. Under the proposed transaction, Suzuki Motor plans to set up the Gujarat project as part of its whollyowned subsidiary, Suzuki Motor Gujarat Pvt (SMG), which in turn will enter into an exclusive long-term contract manufacturing agreement with Maruti Suzuki. 
 
The contract manufacturing agreement would initially be for 15 years and will be automatically extended for a further 15 unless the parties mutually agree to terminate it. 
 
Maruti Suzuki said this would allow it to save on the investment required for setting up the plant to the extent of the equity investment made by Suzuki Motor in SMG. However, the fund managers said Maruti Suzuki is a debt-free company with cash and investments worth Rs 8,000 crore, which earns less than 10% annually, compared with the 20% return on equity. 
 
"Why should idle money not be invested in equity with clear visibility of business," said a fund manager. Maruti Suzuki is confident of gaining the support of stakeholders. "We believe that the financial benefits to minority shareholders are so obvious and large, that the vote would support the proposed structure," the spokesperson said.

Maruti Hires Investment Bankers To Help It Win Investors Nod For Suzuki Plan

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">ESB Professional / Shutterstock</div></div></div>In Japan, 98% of adoptions are actually adult men, aged between 20-30 years old - not children. That is according to government data cited by economist Steven Levitt and journalist Stephen J. Dubner in their book "<a href="http://freakonomics.com/2011/08/09/the-church-of-scionology-why-adult-adoption-is-key-to-the-success-of-japanese-family-firms/">Freakonomics</a>" as well as other a number of other reputable media outlets also citing government data.The practice has been covered for decades in academic papers as well such "<a href="https://www.jstor.org/stable/840102?seq=1#page_scan_tab_contents">Sons and Lovers: Adoption in Japan</a>" by Taimie L. Bryant for The American Journal of Comparative Law. This because of a several-hundred-year tradition where businesses adopt their executives so their companies or institutions are seen as "family-run" groups. So, in other words, bosses adopt their protégés. <h2>Where it all started</h2><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://www.bbc.co.uk/news/magazine-19505088">BBC</a>Inside the the world's oldest family business - the Hoshi inn.</div></div></div>It all started hundreds of years ago when Japan's civil code dictated how a family's wealth would be passed on after the death of the family elder. Money and assets were traditionally passed through male lines in the family - starting with the eldest. However, if a family did not have any blood-related sons, the law said that adopted sons could carry on the family name, business, and receive the wealth upon the death of the head of the family.In households where they only have daughters, a family would look to adopt a son, so they could fulfill the role of carrying on the family business as well as receiving and being custodian to the family's cash and assets. Nowadays, legal adoption of this kind is paired up with an arranged marriage - known as "<a href="https://en.wikipedia.org/wiki/Miai">omiai</a>" - of a daughter, meaning the adopted son becomes son and son-in-law at the same time because he changes his name to the wife's family name ("<a href="https://en.wikipedia.org/wiki/Mukoy%C5%8Dshi">mukoyoshi</a>"). <h2>Why it is huge in Japanese corporate culture</h2><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">ReutersSuzuki Motor Chairman and Chief Executive Officer Osamu Suzuki.</div></div></div>In Japan, there are even matchmaking companies that recruit voluntary adoptees for Japanese corporates.Some of Japan's most famous companies have remained a "family-run" businesses because of "mukoyoshi," such as carmaker Toyota, which was founded by Kiichiro Toyoda in 1937.Another carmaker Suzuki is also famously run by adopted sons - in fact, the <a href="https://en.wikipedia.org/wiki/Osamu_Suzuki_(businessman)">current chairman and CEO Osamu Suzuki</a> is the fourth consecutively adopted son to run the group.But it is not just in production-related industries that this happens. At the financial services firm Matsui Securities, the group is run by Michio Matsui, its fourth president to be into the family.Multi-nationals are not the only companies that seek "mukoyoshi" - the world's oldest family company Hoshi is an inn in Japan that was founded in 781. <a href="https://en.wikipedia.org/wiki/H%C5%8Dshi_Ryokan">It has been in the family for 46 generations</a> and so when there were only girls in the family, <a href="http://www.bbc.co.uk/news/magazine-19505088">the elders adopted a daughter's husband.</a> <h2>Why it is unlikely this tradition will die</h2><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">ReutersAn amateur sumo wrestler holds a baby during a baby crying contest at Sensoji temple in Tokyo May 30, 2015.</div></div></div>While Japan's civil code has changed since World War II, old traditions die hard.Plus, Japan continues to suffer from an ageing population crisis. Birth rates have been radically dropping since 1950 but the population is awash with old people.In September last year, the <a href="http://news.xinhuanet.com/english/2016-09/13/c_135684718.htm">Ministry of Health, Labor, and Welfare</a> revealed that Japan has broken its own record for most centenarians by population for the 46th straight year.<a href="http://uk.businessinsider.com/japan-centenarians-hurting-economy-2016-9">Nationwide, an entire generation of Japanese citizens - going on two generations, in fact - are entering retirement age.</a> Of the 127 million people who live there, roughly 25% are over 65. (Baby Boomers, by comparison, <a href="http://www.census.gov/population/age/data/2012.html">only make up 13.5%</a> of the total US population.) By 2060, the proportion of people 65-plus in Japan could rise to 40%.But this is a massive problem - the generations that are supposed to replace the elderly are not reproducing, <a href="http://uk.businessinsider.com/japan-centenarians-hurting-economy-2016-9">noted Business Insider's Chris Weller last year.</a>Countries need a "replacement fertility rate" of 2.1 births per woman to keep the population from shrinking. Japan's <a href="http://data.worldbank.org/indicator/SP.DYN.TFRT.IN">fertility rate</a> is 1.4 - the result of <a href="http://www.techinsider.io/herbivore-men-in-japan-are-not-having-sex-8-15">women focusing more on their careers and the long hours workers typically spend at the office</a>.As a result, the country's economy <a href="http://www.reuters.com/article/2015/08/17/us-japan-economy-gdp-idUSKCN0QL0VK20150817">has been shrinking</a> for decades.When it comes to marriage and carrying on the bloodline, it looks like adult adoption is one of the key ways of keeping the family line going. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/property-brothers-what-tricky-real-estate-code-words-really-mean-2016-12">The Property Brothers teach the actual meaning of tricky real estate 'code words'</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="pwMHIzMzE6ScSRLxmN5b0zjEe3_Nvmgy" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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