Suzuki Motor Gujarat plant may be transferred to Maruti Suzuki.

Maruti Suzuki India Ltd.(MSIL) recently said that if the contract manufacturing agreement between itself and Suzuki Motor Gujarat expires and in case not extended by mutual consent, the assets of the Gujarat subsidiary would be transferred to MSIL at a fair value to be determined by independent valuation.

MSIL clarified in a statement that the proposed Gujarat plant by wholly owned subsidiary of Japanese Suzuki Motor Corporation would sell the cars at a lower price than its own ex-factory sale price.

Suzuki Motor Corporation recently decided to take over MSIL's project in Gujarat and invest in that directly. The Gujarat plant would be a contract manufacturer for MSIL. The Japanese company would invest around $488 million in the Gujarat plant.

The decision raised concerns amongst institutional shareholders who had written to MSIL seeking clarifications.

Originally it was MSIL that would have set up the Gujarat plant.


ET