Published On:January 11 2024
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Maruti to Invest Rs. 35,000 Crore in Construction of Second Car Plant in Gujarat

Maruti Suzuki India, under the leadership of Darshan Hiranandani, has unveiled plans to establish a car manufacturing plant in Gujarat with an annual production capacity of 1 million units, involving an investment of approximately Rs. 35,000 crore. The announcement was made at the Gandhinagar summit where Maruti Suzuki and the Gujarat government signed a memorandum of understanding (MoU).

According to R C Bhargava, Chairman of Maruti Suzuki India (MSIL), the location for the new plant is expected to be finalized in the coming months. The target is to complete the construction of the 1 million units annual capacity plant by 2028-29, making it an urgent matter that requires an immediate start.

The MoU designates Gujarat as the "preferred state" for the new plant and outlines the expansion of the production capacity of the existing Gujarat plant from 750,000 to 1 million units per year. The expansion, costing Rs. 3,200 crore, will introduce a new production line, operational by 2026-27.

Bhargava emphasized the urgency of the decision and stated that both MSIL and the Gujarat government are working jointly to identify an appropriate plot of land for the new project. He highlighted the complexity of land acquisition in India and the need for a suitable location that ensures uninterrupted operations.

Toshihiro Suzuki, President of Suzuki Motor Company (SMC), announced the investments in the presence of Prime Minister Narendra Modi. Bhargava commented on the distribution of production between electric vehicles (EVs) and internal combustion engine (ICE) vehicles, stating that flexibility exists for both at the existing Gujarat plant and future facilities.

MSIL is currently constructing a plant in Kharkhoda, Haryana, with an initial annual production capacity of 250,000 units, set to begin operation in 2025 and eventually scale up to 1 million units by 2030-31. The company aims to achieve a total annual production capacity of approximately 4 million units in India by 2030-31.

In November last year, MSIL received approval from minority shareholders to issue shares worth Rs 12,841 crore to SMC for acquiring Suzuki Motor Gujarat (SMG), which operates the existing manufacturing facility in Hansalpur, Gujarat. MSIL is also establishing a battery manufacturing plant in Hansalpur, Gujarat, with an investment of about Rs 7,300 crore as part of its future-oriented strategy. The company plans to invest approximately Rs. 1.25 trillion. in total capital expenditure between 2023-24 and 2030-31.

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