Maruti Suzuki India Ltd (MSIL) Chairman RC Bhargava is confident of rolling out the first car from its Gujarat project in 2017.

“Market conditions are changing now. We had put our Gujarat project in a slower mode (due to slack sales last year). We are confident of starting production in 2017,” Bhargava told reporters on the sidelines of an award ceremony at Ahmedabad Management Association (AMA) in the city on Wednesday.

Drop in sales

Car sales in the country dropped by 10 per cent – for the first time in 11 years – from 1.99 million units sold in 2012 to around 1.80 million units in 2013.

Bhargava expressed the confidence that Prime Minister Narendra Modi and his new government would bring about radical changes in the system to revive the economy.

“Within days of assuming office, Modi took a first step in right direction by abolishing the Group of Ministers (GoMs), which was the reason for delays in implementation. This indicates that the new PM doesn’t believe in passing the buck, discussing issues and yet not taking any decision. There will be accountability,” Bhargava said in his address.

Earlier in the day, Bhargava had made a “courtesy call” on the new Chief Minister, Anandiben Patel, and also interacted with her team, including Finance Minister Saurabh Patel, over the issues that cropped up after the company changed its project model in Gujarat.

“It was a courtesy visit… Secondly, it was to apprise, both the Chief Minister and the Finance Minister, of the change from a single-company model for the Gujarat project to a two-company model. It is a change only in the concept, while everything else remains the same about project, be it investment, production of cars, setting up of ancillary units or training, nothing changes,” Bhargava told the media on the sidelines of the event.

MSIL had signed a State support agreement (SSA) with the State government in June 2012 to set up a manufacturing facility with a capacity of about 250,000 units a year with an initial investment of ₹4,000 crore.

Transfer of control

However, earlier this year, MSIL board had announced the transfer of control of the Gujarat manufacturing plant to the Japanese parent Suzuki Motor Co.

“This was appreciated by the government. They have promised that their commitment to the project and the incentives offered remain intact,” he added.

The government, on the other hand, suggested the company consult legal experts to go into the details and work out the taxation issues etc to avoid complications in later years.

Related Topics
comment COMMENT NOW