Companies

Maruti Suzuki to expand production capacity by 2.50 lakh units a year

S Ronendra Singh New Delhi | Updated on December 29, 2020

Gujarat facility will have a capacity of 7.50 lakh units per annum ; but no electric or diesel vehicles ‘at the moment’

Maruti Suzuki India (MSIL) will add another 2.50 lakh units of vehicles to its production capacity from April 1, 2021 through Suzuki Gujarat's third plant. However, it will not produce any diesel or electric vehicles as part of this expansion, a top official said.

MSIL has 15-lakh capacity at its Haryana facilities (Gurugram and Manesar) and five-lakh capacity at Suzuki Gujarat, which will be expanded to 7.50 lakh units per annum now.

The Gujarat facility, as a subsidiary of Suzuki Japan, manufacturers Baleno (Glanza for Toyota) and Swift at present. It may produce other models from April. According to sources, the company has asked its vendors to increase capacities to meet the demand across its plants.

"We will commission extra capacity in the next financial year around April 1 in Gujarat. So, another extra 2.50 lakh capacity will be added next year. I hope the demand will sustain so that we can use that capacity," RC Bhargava, Chairman, MSIL, told BusinessLine in a recent interview.

He said the demand has to be better next year than in the current year as the economy is improving and the world is coming out of the pandemic. Though it may not be comparable to what it used to be two years ago .

"The industry saw a drop by 18 per cent last year and it will decline on similar lines this year also. Compared to 2018-19, it will be around 20 per cent lower and that is a lot. So, in 2021-22, that at least has to be made up...if you get even 20 per cent growth next year, that will still bring you not even up to what it was in 2018-19," he said.

Bhargava explained that since the market has already fallen so much, the higher demand (as compared to this year) would help the industry in some recovery, but added that everything will be related to economy and demand will come only when the economy improves.

"People need to have disposable incomes. Without that you can't do anything. Which means economy has to grow, new employment has to be created, people have to get increments and promotions, businesses have to improve and make profits," he said.

When asked about electric vehicle that the company is already test-running for the past two years, he said there is 'no commercial possibility just now'. On diesel vehicles, Bhargava said 'nothing at the moment' along with Toyota partnership also. MSIL does not have any diesel variant in its portfolio right now, after the BS6 regulations.

Published on December 29, 2020

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