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Maruti Suzuki eyes expansion in Gujarat, buys another 600 acres plot

Maruti Suzuki India has bought another plot of about 600 acres in Gujarat for setting up a second factory in the western state as part of its expansion plans.

Mail Today Bureau   New Delhi     Last Updated: December 24, 2012  | 11:37 IST

Maruti Suzuki India Ltd (MSIL) has bought another plot of about 600 acres in Gujarat for setting up a second factory in the western state as part of its expansion plans.

"We have started the spadework to set up a second facility in Gujarat with the acquisition of another 600 acres about 40 km from the existing site allotted by the state government," R. C. Bhargava, chairman, MSIL, told reporters.

"We have land at two locations in Gujarat. The first one was offered by the government and the second one is private land that we have directly acquired with some negotiations by the government," Bhargava added. "The second location is for our expansion. Once we exhaust the capacity at the first site, we will move to the second one."

Bhargava disclosed that the "ground breaking" for the company's Gujarat plant will happen in early 2013. He did not share details about when MSIL will start construction at the second site.

FROM THE MAGAZINE:Why Maruti will not leave Manesar

When asked if MSIL is shifting its focus from Haryana, where its operations were severely disrupted due to the July 18 labour violence, Bhargava said, "We are not moving away from Haryana. We have two plants in the state and are going to Gujarat after utilising the capacity completely in Gurgaon and Manesar. We will do the same once we exhaust the capacity in Gujarat."

MSIL had earlier this year announced a Rs 4,000-crore plan, its biggest-ever investment outside Haryana, to set up a 700-acre new production facility in Gujarat by 2015-16.

Components suppliers of the company are also likely to invest an equal amount to set up their respective plants. The capacity of the manufacturing facility in the first phase will be 2.5 lakh units a year.

Bhargava further added that the Manesar plant is back to normal and producing 1,950 cars per day, more than what it used to produce before the shutdown.

FROM THE MAGAZINE:Maruti starts price war with new Alto; will it pay off?

About the company's performance this fiscal, Bhargava said, "We are going to end this year with a growth of about 6 per cent over last year. Overall, there is a sign of softening in India's car market due to various factors."

The company also expects about 6-to-7 per cent sales growth in 2013-14 after closing the current fiscal with about six per cent rise in vehicle sales.

Commenting on exports, managing director and chief executive officer Shinzo Nakanishi said that MSIL is finding the going tough due to the decline in the European market. "Last year, we exported 1.27 lakh units. This year, it could be a little less because of the slowdown in Europe, which used to be our biggest overseas market."

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