Companies

Maruti Suzuki ‘will drive South’ for its third plant

S Ronendra Singh New Delhi | Updated on January 07, 2019 Published on January 07, 2019

RC Bhargava   -  PTI

Closer to market and good for exports: Bhargava

South India could get the next plant of the country’s largest passenger car maker Maruti Suzuki India (MSIL) as it works on its expansion plan.

“If we have to expand further beyond our existing capacity — Gujarat and Haryana (both put together) — then South is a logical region to put up a plant. I can’t see where a third site would be other than in the South. That will be nearer to the market and good for exports too,” RC Bhargava, Chairman, MSIL, told BusinessLine in an interview.

The southern part of India is becoming a new hub for the auto makers to set up facilities as the States offer rebates on taxes and there is also the proximity to ports. For instance, Andhra Pradesh has welcomed many players in the recent past such as Kia Motors — setting up its first facility — and Hero MotoCorp — building its eighth facility — in the State. Similarly, Tamil Nadu has many success stories such as Hyundai Motor India, Nissan and BMW.

Suzuki Gujarat, which has a capacity of 2.5 lakh units per year right now, will be expanded to 7.50 lakh units per annum by 2020, and the company has a target to sell around 20 lakh passenger vehicles in a year by 2020 from all facilities put together.

Right now, the Haryana plants (Manesar and Gurugram) have a capacity of 15.5 lakh unit per annum put together. Gradually, the company aims to make 30-lakh vehicles by 2030.

Expansion in Gujarat

About the timeline, he said, “We will decide to put up a third site when the Gujarat site is about to be fully utilised. That is not unreasonable at all to think of…it is just that timing is another issue.”

With the congestion increasing at Gurugram by the day, there has been a lot of pressure on MSIL to shift its facility from there and the company has started looking at various options, including within Haryana only so that employees working at the plant are not affected, Bhargava added.

MSIL makes most of its top models, including the Swift and the Wagon R, at the Haryana facilities.

The company sold around 13.08 lakh vehicles between April and December, up 7.4 per cent compared with 12.20 lakh units in April-December 2017. It had a market share of 52 per cent between April and November 2018.

Published on January 07, 2019
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