In the backdrop of labour unrest and violence recurring at the Manesar facility of Maruti Suzuki in Haryana, the Gujarat Chief Minister, Mr Narendra Modi, will be meeting the top Suzuki management next week apparently to explore possibilities of the automobile major “shifting” the Indian company’s base to the western State.

Mr Modi is to lead a team of Gujarat officials, business and industry leaders to Japan on a four-day visit from July 22 to woo investors for the next edition of Vibrant Gujarat scheduled for January 2013. “We will be participating in about 40 events in Japan, including a meeting with the Suzuki management,” said a senior government official here on Friday.

In June 2012, the Gujarat Government had signed a state support agreement (SSA) with Maruti Suzuki Industries Ltd (MSIL), allotting it 700 acres at Hansalpur, about 100 km from Ahmedabad. The company hopes to begin production by 2015-16 in the first phase, with a capacity of 2.5 lakh cars. MSIL and its investors will initially pump in Rs 4,000 crore on the project and scale it up to Rs 18,000 crore to make 7.5 lakh units annually. Recent reports suggested that Maruti is scouting for an additional 300 acres near Hansalpur, which is nearly 300 km from Mundra port in Kutch district. MSIL has a pre-export inspection facility, with a capacity of two lakh vehicles, to send cars via the Gulf of Kutch and the Arabian Sea to the southern States and overseas.

However, if MSIL decides to shift to Gujarat, it will have to take into account the increased transportation cost of its cars to the huge northern Indian market, particularly when its third plant at Manesar is expected to start in 2013-14, the sources said.

In 2008, Tata Motors had shifted its Nano plant from Singur in West Bengal to Sanand in Gujarat. While Mr Modi’s visit to Japan has been in the works for a while, including his meeting with the Suzuki top brass, the Manesar violence is now likely to be in focus in an attempt to convince the company about better operating climate in Gujarat.

(This article was published on July 20, 2012)
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