Maruti unmoved over the Gujarat plant transfer deal with Suzuki

Maruti Suzuki India is firm with their decision to transfer the functioning of Gujarat manufacturing plant to Suzuki- the parent firm. With this the company officials say that there will not be any impact on the manufacturing activities and send out an assurance to the shareholders, who are constantly criticising this move of the company.

The country's largest car maker's recent decision comes in the wake of seven significant fund houses that includes shareholders, who seem to be following opposite wave to this particular decision. The investors can't let this decision go against their interest, so, major fund houses are in fear that Maruti Suzuki now would be mere a 'marketing firm'.

Mr. RC Bhargava, Maruti Suzuki India, Chairman commented saying, “ We are convinced that what we are doing is the right thing. We are also answering everybody and will continue to make efforts in that direction and that's all we can do.” He added saying, “We have always been a marketing company. We assemble, mark my words assemble 1.2 million cars at the moment. But remember in this assembly of 1.2 million cars, 70 per cent of the manufacturing is done by the vendors and not by us. And in any case 1.5 million units will be continued to be produced in Gurgaon and Manesar (together), so its not if all our production is outsourced”.

The main seven investors hold 3.93 per cent stake in MSI, while the state-run LIC holds 6.93 per cent of stake. The decision to pass on the Gujarat plant to the parent company was passed on 31st December'2013. As per this plan, the parent company is suppose to invest in the plant as wholly Suzuki Motor Gujarat Pvt Ltd, which will be exclusive manufacturing unit for MSI.

Source- PTI