Slowdown forced Maruti Suzuki to delay Gujarat plant

The long slowdown period of car sales in India has forced the country's largest car manufacturer, Maruti Suzuki to reconsider its plans of expansion. The company's expansion plans include a new set up of manufacturing plant in Gujarat. For the first time, the Indian subsidiary of the Japanese automaker has acknowledged that it will not be able to straight away commence its Gujarat plant due to the current slowdown in the Indian car market.

At the company's 32nd Annual General Meeting, Maruti Suzuki's chairman RC Bhargava told reporters, "It is unlikely that we would be able to commission the Gujarat plant even by the end of FY16. The slowdown in the auto sector is very acute."

The company is yet to start any industrial construction work at the site. Before taking any decision on the development of Gujarat production base, MSI plans to execute a detailed study of the passenger car demands in the Indian market over the next two to three years.

The Gujarat government had allotted 700 acres of land to Maruti Suzuki India for its third manufacturing unit, near Mehsana, in June last year. The firm planned to invest about 4000 crore to set up a production base in Gujarat, and the facility will have an initial capacity of developing 2,40,000 units, which would be operational by 2015-16.

Source: ET