Business Today

Maruti Suzuki India bets big on Gujarat wheels

Labour problems in Haryana are forcing other automakers to follow in the footsteps of leading carmaker Maruti Suzuki India to invest in Gujarat for expansion.

Anuradha Shukla   New Delhi     Last Updated: February 19, 2013  | 11:46 IST

Labour problems in Haryana are forcing major automakers, including Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI), to follow in the footsteps of leading carmaker Maruti Suzuki India Ltd (MSIL) to invest in Gujarat for expansion.

MSIL has already put the Gujarat plant on fast track with an investment of Rs 4,000 crore. The company will start construction at Bechraji in Mehsana district of north Gujarat next month and is expected to start production by mid 2015.

The company also purchased land at a second location in Gujarat for its fourth factory with a capacity of about 750,000 units a year which will be operational by 2017. The Gurgaon and Manesar factories in Haryana have been producing 17.5 lakh cars per annum.

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MSIL chairman R.C. Bhargava told MAIL TODAY: "One of the main advantages is the proximity to the port. We would be using the port to expand our exports to the Middle East. It will also help expand exports to Europe. We have land at two locations and in future it would be just like the Gurgaon and Manesar plants. In the first phase, we expect the capacity to be up to 250,000 units."

Even while Bhargava did not mention the labour problem as the reason for moving out of Haryana, according to reports, the company is already hiring people from Gujarat and other places outside Haryana.

NEW RAY OF HOPE

  • MSIL has already put the Gujarat plant on fast track with an investment of Rs 4,000 crore
  • The company will start construction at Bechraji in Mehsana district of north Gujarat next month and is expected to start production by 2015
  • Hero MotoCorp has lined up Rs 1,100 crore for its next plant in Halol at Gujarat
  • Hero MotoCorp has already acquired 130 acres out of the 250 acres proposed for the plant with a total capacity of 1.2 million units a year
  • With automobile giants moving to Gujarat, even Automotive Component Manufacturers Association of India, the agency for the auto component industry, is going to to set up its first supplier park over 1,100 acres
Hero MotoCorp, which is also facing labour problems at its plant, has already signed an agreement for its fifth plant in Gujarat with a total capacity of 1.2 million units a year. The company plans to invest Rs 1,100 crore in the venture. Hero MotoCorp has already acquired 130 acres out of the 250 acres proposed for the plant.

The land acquisition process, which was delayed due to the Assembly elections, is back on track and the company expects to complete the work on the factory ahead of the deadline.

HMSI is in talks with the Gujarat government for buying land at two locations which are close to the port. "Gujarat has become a preferred destination for many auto companies.

"We are exploring opportunities here but we cannot say anything at the moment," HMSI president and chief executive officer Keita Muramatsu had said in an earlier interaction.

"After the violence at one of the units at Manesar, the problems are simmering again in this belt," D.S. Rawat, secretary general, Assocham said.

Labour unions, patronised by various political parties, are difficult to handle and strikes are frequent in the area.

In association with Mail Today

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