Maruti progresses on land acquisition for Gujarat plant, defers production 

Maruti Suzuki India’s plans for a new plant in Gujarat are not progressing at a pace it is expected of. The land acquisition plans for the new plant are already on the way which are likely to fall through within a month. But, the Maruti Suzuki India Chairman RC Bhargava said that the production is not likely to start any time soon. The production at the plant is expected to begin from 2016 and that gives them time of another two to three years before they start the construction work for the plant.

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They do not see the actual work to start anytime before 2013. Maruti India hopes to invest a substantial sum of Rs 18 crores in the new industry friendly state of Gujarat to set up the new plant. As many as 20 lakh units are expected to be rolled out from the new proposed plant at Mehsana district of Gujarat. Instead they are hoping to enhance the production at the Manesar plant itself.  Until now, there are two plants in Manesar apart from the Gurgaon plant that serves the country’s leading manufacturer with supplying few of the best cars like Maruti Swift, Maruti Swift Dzire, Maruti Alto and Maruti A-Star and so on. The three plants put together roll out 1.2 million units annually.

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An investment of Rs 3000-4000 crore is supposed to be made to set up the third plant at Manesar, a new R& D facility for the car maker and to enforce some improvements on the existing units. On an overall, the four plants will be able to produce 1.7 million units once the third Manesar plant is up and functioning. The overall slowdown in the market has led the auto major to defer the plans for the Gujarat plant. The car industry as such has suffered 4% slowdown and MSI is the worst hit among the lot due to the recurring strikes at the plants. Moreover, Bhargava had clearly mentioned that when there is no demand for the cars, there is no point in setting up the new manufacturing unit in Gujarat. Basically, why increase the capacity when there is no demand to start with.

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