Maruti Suzuki to invest ₹10,189 crore to build a new plant in Gujarat

Japanese carmaker Maruti Suzuki India Ltd on Tuesday said its board has approved an investment of Rs 10,189 crore to set up a new car manufacturing plant in Gujarat owing to strong growth in demand in the domestic and export markets.

“This includes investment for the first phase of car manufacturing plant having an annual manufacturing capacity of 250,000 units and some common infrastructure and facilities for future plants,” India’s biggest carmaker by volume said in a stock exchange filing.

This first phase of capacity of 250,000 vehicles per annum is expected to be added by 2029, subject to market conditions, the automaker said, adding that the financing will be from internal accruals.

Maruti Suzuki said its existing capacity of 2.4 million units per annum across Gurugram, Manesar, Kharkhoda and Hansalpur is being fully utilised.

The board approval comes two months after Maruti Suzuki said it will invest Rs 4,960 to buy land for its new manufacturing facility in Khoraj Industrial Estate on the outskirts of Ahmedabad. The new plan in Gujarat will have a proposed capacity up to 1 million units.

It is unclear whether the new plant in Gujarat will be used for making electric vehicles. Maruti Suzuki has been facing production capacity constraints after the goods and services tax (GST) rate rationalisation announced last year boosted demand across segments. The carmaker recently said it expects production capacity of the e-Vitara to remain constrained at around 2,000 units per month for the domestic market until July 2026.

“We have a line with a capacity of 100,000 in Gujarat. On the same line, we are producing the Fronx. We have got some allocations for our export partners (Toyota). After GST 2.0, the response to Fronx has been tremendous. We are not able to cater to demand of customers,” Partho Banerjee, Senior Executive Officer, Marketing and Sales at Maruti Suzuki, told reporters in February.

“We are trying to balance between domestic market and exports. That problem will be there till the month of July. After July, we are going to expand the line capacity,” he added.