Maruti Suzuki India plans to establish a car manufacturing plant in Gujarat with an annual capacity of 1 million units at an investment cost of about Rs 35,000 crore, it ann-ounced on Wednesday. Later, MSIL Chairman R C Bhargava said the plant’s location is expected to be finalised in a few months.
Earlier in the day, India’s largest carmaker and the Gujarat government signed a memorandum of understanding (MoU) for the new plant at the Gandhinagar summit.
Both the government of Gujarat and the MSIL recognize the urgency of reaching a decision and a conclusion (with regard to the location). The construction of this 1 million unit annual capacity plant needs to begin as soon as possible because our goal is to finish it by 2028 or 29. Thus, there is a sense of urgency. In the event that it wasn’t included in the Memorandum of Understanding…In a phone conversation with Business Standard, Bhargava stated, “This is an urgent matter where we could not afford delays.
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According to Bhargava, the MoU covers two important areas. To begin with, Gujarat has been named the “preferred state” for the new plant’s establishment. Secondly, a new production line will be added to the company’s current Gujarat plant, boosting its annual production capacity from 750,000 to 1 million units. The new production line is scheduled to begin operations in 2026–2027, and the expansion is expected to come at a cost of Rs 3,200 crore.
Gujarat is the state that we would prefer to see the new facility located in order to produce an additional one million cars annually, as stated in the Memorandum of Understanding. According to him, it is a desired state, provided that suitable land is available. According to him, the Gujarati government and MSIL are currently cooperating to determine whether a suitable piece of land can be found for the project.
Regarding when the location would be decided, Bhargava stated: “As soon as possible and certainly, in the next few months.” It must be completed in a few months, he emphasized.
Toshihiro Suzuki, President of Suzuki Motor Company (SMC), made the announcement about the investments in front of Prime Minister Narendra Modi. The parent company of MSIL is SMC.
Bhargava responded, “EVs are yet to start,” when asked how the plant would divide up the production of ICE (internal combustion engine) and electric vehicles. It will be known in two to three years’ time how the markets respond to these cars.”
“Because this entire line is available to us at the current Gujarat plant, we can increase production to meet market demands. We can add a line specifically for the production of electric vehicles at the Kharkhoda plant in Haryana. We can convert a line for the production of EVs at the current Gujarat plant.
Right now, MSIL can produce 2.25 million units annually at its three plants: Hansalpur in Gujarat, Gurgaon and Manesar in Haryana. Additionally, it is building a plant in Kharkhoda, Haryana, with a 250,000 unit annual production capacity. Phase 1 of the project is scheduled to start next year. By 2030–31, the Kharkhoda plant will be gradually expanded to a capacity of one million units annually.
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Maruti Suzuki India intends to acquire a production capacity of roughly 4 million units in India by 2030–31 in order to get ready for the country’s car market to grow in the future. The company said that the new plant in Gujarat, the fourth production line of SMG, the company that operates the current plant in Gujarat, and the new plant in Kharkhoda, Haryana, which is scheduled to begin operations in 2025, will all contribute to reaching the 4 million milestone.
Maruti Suzuki India received permission from its minority shareholders in November of last year to issue shares to SMC in the amount of Rs 12,841 crore in order to acquire SMG (Suzuki Motor Gujarat), which is in charge of the company’s current Hansalpur, Gujarat, manufacturing facility. MSIL entered into this deal with the intention of improving production efficiency and streamlining its organizational structure.
At an estimated cost of Rs 7,300 crore, MSIL is also building a battery manufacturing facility in Hansalpur, Gujarat.
On October 9 of last year, MSIL declared its intention to invest around Rs 1.25 trillion in total capital expenditure (capex) between 2023–24 and 2030–31 in order to get ready for the future.
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