New Delhi: According to the United Nations Conference on Trade and Development's (UNCTAD) publication, World Investment Prospects Survey 2010–2012, India will be the second-most popular destination for foreign direct investment (FDI) globally over the next two years.

The developing Asia region is predominantly considered as the most-sought place for FDI, with six Asian countries featuring in the top 15. The survey was aimed at the largest global non-financial transnational companies (TNCs), national investment promotion agencies as well as location experts and explores the upcoming trends in the global FDI over the next three years.

According to the survey, 62% of respondents believed that things would look up in 2012. In fact, 58% of TNC's are planning to increase their international investment expenditures in the next three years. It is positive news, given that many developing economies depend on FDI inflows to ensure growth in their domestic markets.
The report further highlighted that for the first time, the four BRIC (Brazil, Russia, India and China) countries all ranked in the top five for FDI inflows. The top investment destination for FDI remains China, followed by India, Brazil, the US and the Russian Federation.

Furthermore, the data released by other international organisations reflected the improved condition of global FDI since 2008. The Economist Intelligence Unit predicted that global flows will grow to US$1.3 trillion in 2010. The International Monetary Fund (IMF) reported that the net inflows in emerging and developing economies were up to US$294.1 billion in 2010 as compared to US$274.8 billion in 2009. The UNCTAD predicted a further increase of global FDI between US$1.6 and US$2 trillion in 2012.

Interestingly, developing economies have moved up the ranks in their capacity of serious investors. Half of the 20 most promising investor countries were economies in transition, with India ranking sixth globally. (source:IBEF)

Will increase capacity 46% to 17.5 lakh units.
New Delhi: To capitalise on the rapid growth of the Indian auto industry, Maruti Suzuki India Ltd (MSIL) announced on Tuesday an investment of ¥35 billion, or Rs 1,925 crore, for setting up its third plant at Manesar. This new production line – Maruti's sixth overall –  would have 2.5 lakh units annual capacity.

With the new plant, the car market leader hopes to increase its total capacity 46% to 17.5 lakh units a year. Facing a major capacity constraint and huge demand for its products, MSIL currently manufactures 12 lakh units a year. However, the installed combined annual capacity across the existing Gurgaon and Manesar facilities is around 10 lakh units.

Addressing a shareholders' meeting, Mr Osamu Suzuki, Chairman and CEO of Suzuki Motor Corporation (SMC), said that the company had earlier not correctly estimated the current pace of growth of the Indian car industry. Japan-based SMC owns a 54.2 per cent stake in MSIL. Mr R.C. Bhargava, Chairman, MSIL stated, “Now that the in-principle approval has been given by Mr Suzuki, the investment will have to be approved by the board at its meeting in October. Some work will already start now though.”

Manesar Expansion
He added that the Rs 1,700-crore ongoing expansion project for a second line at the existing Manesar plant will be accelerated by about six months. It was earlier expected to be operational only by April 2012. This expansion project will be completed before the new third plant opens at Manesar and will provide Maruti a similar annual capacity of 2.5 lakh units.

“We are trying to start the assembly line in the expansion of Manesar by September 2011. Since there is so much demand, we are trying to advance it as much as we can,” he noted. As part of its plan to increase production capacity, Maruti is also upgrading and modernising its Gurgaon facility. This is expected to help by adding further capacity and in meeting the 17.5 lakh production target of the next few years. No investment for this was announced, however.

“Out of the three plants (production lines) at Gurgaon, the machinery at the first and oldest plant is being scrapped and modernised,” said a company official. The Indian auto market – Asia's third largest and the second fastest growing globally – accounted for sales of 15.26 lakh units of passenger cars in 2009-10, marking a growth rate of 25%. Of the total, Maruti's share was around 50% with sales of 7.65 lakh units. Industry body SIAM predicts annual car demand to grow to 30 lakh units by 2015.