The Hindu Business Line : Maruti acquires more land for fourth plant, plans gearbox unit

MARUTI Udyog Ltd has acquired 100 acres of additional land in Haryana (500 acres was allotted already) for its fourth assembly line in the country to fuel expansion plans and launch new cars.

The expansion plans, spread over three years, will see a total investment of about Rs 6,000 crore that includes Rs 1,000 crore for its diesel engine plant announced late last year.

Speaking to reporters here, the Managing Director of Maruti Udyog, Mr Jagdish Khattar, said the automotive sector has grown at a healthy pace of about 20 per cent this year and the trend is likely to continue this year. Maruti accounts for about 65 per cent of petrol-driven cars in the country across all segments.

"However, from just about 3-4 per cent of diesel variants about a few years ago, it has grown to about 20 per cent this year. This has become a significant market. Therefore, we have decided to invest Rs 1,000 crore on the diesel plant that would have the capacity to build 3,00,000 engines per annum. This would be for both Maruti's and Suzuki's consumption.

"We will wait till the plant brings in the new engines; we don't have any plans to import diesel engines for the time being. Alongside this initiative, we are also contemplating a gearbox unit," he said.

The A2 segment comprising Zen and Wagon R has grown significantly this year; the same is true with the A3 segment too. The relaunched Maruti Esteem is a hit, selling about 2,500 cars a month - up from 800-900; there continues to be wait-list.

"We are all set for the launch of Swift in the Indian market but would not like to comment on other possible launches. Andhra Pradesh registered about 30 per cent growth last year opposed to all-India average of about 20 per cent," said Mr Khattar.

Planning on the fourth plant is on. It will have a capacity to manufacture about 2,50,000 cars a year, thereby, expanding the capacity significantly from about 6,00,000 now to 8,50,000. He said no manufacturer would phase out a car that continues to sell in large numbers and is popular, referring to Maruti 800.

"When we partnered with SBI, people did not realise its impact. From just about 40 cities, we have managed to have access to about over 200 cites, thereby, tapping new markets. Others are now following suit," Mr Khattar said.

The overall growth of the automotive industry will continue this year. However, it is not possible to peg the growth rate, as this will depend on other policy-related issues, including the current duty structure, which is pretty high at 24 per cent, said Mr Khattar.

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