Maruti Suzuki India to set up a dedicated diesel engine plant in Gurgaon

Maruti Suzuki India has suddenly turned the tables where its diesel powerplant is concerned. The latest hot news doing the rounds is Maruti India has called the shots on its impending decision on new diesel plant. However, Maruti Suzuki India surprised many when it broke the news of the new diesel plant to be set up in Gurgaon, in contrary to its earlier plans. The initial take would be to have 100,000 units of the diesel engines to be rolled out from the upcoming plant with an investment of Rs 1000 crore to meet the development costs.

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What seems to be clear at the moment is that Maruti Suzuki India hopes to dedicate the upcoming plant in Gurgaon entirely for the diesel engines as it does have a separate plant developing the petrol engines for the Maruti cars. Maruti Suzuki India was delaying the decision for over a period of time for two main reasons. One, the next budget session is likely to turn around the scenario for the diesel cars with the Indian governemnt all set to slap an additional excise duty on the diesel cars as such.Number two is Maruti Suzuki has suffered huge losses in the past year and an additional time would only give the car manufacturter enough breathing space to get the situation well in control.

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What's more its further astonishing to hear such a decision when MSI has ample reasons in hand why its shouldnt be taking this hasty decision. It had very recently finalised the land deal in Gujarat and had a sought out for a helping hand from Fiat to source the 1.3 L diesel engines to have the timely supply of its diesel cars. Simultaneously, Maruti Suzuki India is facing another situation which needs to be sorted out smartly. The Maruti diesel cars in India are selling like hotcakes despite its meagre line-up of just four cars – Maruti Swift, Maruti Ritz, Maruti SX4 and Maruti Swift Dzire putting up the show contributing to 80% of the overall Maruti India sales. Ironically, the high selling cars have become the prime issue for the car manufacturer for the company is failing to supply the diesel powertrains matching the demand delaying the waiting period some times up to 6-9 months in a few cases.

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The only supplier Suzuki Powertrain, in which Maruti India holds only 30% stake with its Japanese counterpart is allowed to utilise mere 100,000 units of the total 300,000 unit capacity it rolls out. Weighing all the options, it boils down to Suzuki Powertrain Ltd, which is the knight with the shining armour at the conditions such as now and could be the only reason for this untimely strategy implementation.