Maruti may move to Gujarat owing to unending labour unrest

Maruti India is aggressively looking to start its manufacturing facility in the industry-friendly state of Gujarat. Maruti Suzuki India, which has its manufacturing plants spread at Manesar and Gurgaon has suffered a major production and monetary loss due to the prolonging labour unrest. Despite Haryana Government’s apprehension over MSI’s expansion plans into Gujarat, Suzuki Motors feels that setting up the new plant is their top most priority to have its production levels back to normal. The company’s sales have hit the rock bottom and their rivals are bent to capitalize on the situation by ramping up their production capacities to beat the Maruti cars waiting periods by far.

Suzuki Chairman, Osamu Suzuki had held discussions with Gujarat Chief Minister, Narendra Modi on September 8^th with the intention to set up a new manufacturing unit in Gujarat in between their efforts to bring an end to the labour unrest. The MSI board is yet to approve the investment proposal of Rs 18,000 crores on the prospective site spread over the area of 1000 acres at Becharji, Gujarat. The upcoming plant is expected to have a production capacity of 2 million units. The Gujarat plant will be the largest with respect to the area, which is more than the Gurgaon and the Manesar plants put together. On the other hand, Haryana Government will have to face a major blow. Once the operations from the Gurgaon plant slowly shifts to the new upcoming plant, many changes including a major drop in the real estate value will take place. However, the Suzuki Motors maintains that it is unhappy with the way the Haryana Government has handled the labour unrest at MSI plants.

Following the worker agitation at MSI, the Honda Motorcycles and Scooters India has also decided to shift the operations to their new plants in Karnataka and Rajasthan. The three-time workers strike at MSI including the ongoing 12-day strike has impacted the auto major with a production loss of 60,000 units and a monetary loss of 1,800 crores. While RC Bhargava, the Chairman of MSI did not comment on the Haryana’s inability to control the situation, he did not spare in expressing his views on the pathetic condition MSI is undergoing at the moment. He said that not only their Japanese subsidiary’s investments are at stake, but also many other foreign investment plans will be ruffled. Hence, considering all the options, a new plant in Gujarat is imminent. When we employ the term “urgent”, if and when the Gujarat plant proposal is approved, the production will only begin from 2015. A first phase capacity of 1 million units are expected to be rolled out by 2020.

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