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Maruti Suzuki is freeing up fresh space for engine production at its Gurgaon plant, in order to be prepared for any sudden shift in demand as was seen last year with diesel models.
The car manufacturing capacity at its original facility will be reduced to about 5 lakh units by 2015, from around 9 lakh units it made at the peak in 2010 (out of an installed capacity of 7 lakh units). The carmaker estimates that freeing even one lakh car capacity will give it at least 2-3 lakh engine capacity.
Mr M.M. Singh, Maruti's Managing Executive Officer for Production, said that the Gurgaon facility's location in an increasing residential area is leading to higher process times and lower efficiency.
Manesar, Gujarat shift
“About 2,500 trucks come in with material every day, while 300 trailers go out with cars. These trucks create a lot of traffic pile-up and slow down movement.
“Gurgaon makes a lot of our older models such as the 800, Alto and Omni. As these get discontinued, the car production capacity at the plant will be reduced. Most new models will be made at our more automated lines at Manesar and Gujarat,” he said.
This car capacity will shift to an upcoming third plant at its second Manesar facility, which will be ready by August 2013, and a third 1,200-acre facility announced in Gujarat by 2016.
“It is unlikely though that car production will completely stop at Gurgaon, but is likely to reduce significantly in favour of engines,” he added.
With the carmaker finding itself in an acute shortage of diesel power plants over the last year, this is seen as a security measure for the future. To reduce 4- to -6-month-long waiting periods on diesel models such as the Swift and Dzire, Maruti has signed an interim arrangement with Fiat for one lakh diesel engines a year.
A new engine plant for 1.5 lakh more such engines will be ready by mid-2013 (extend to 3 lakh by 2014), adding to an existing 3 lakh diesel engine capacity. It has an additional 13 lakh petrol engine capacity, 40 per cent of which is unutilised.
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