Modi welcomes Maruti Suzuki’s decision to set up shop in Gujarat

Virendra Pandit | | Updated on: Mar 12, 2018

BhargavaMaruti

With the mother of Indian car-making, Maruti Suzuki India Ltd (MSIL), also deciding on Saturday to set up its next manufacturing plant in Gujarat at a total investment of Rs 18,000 crore, the transformation of the western state, ravaged by the killer temblor of 2001, into an automobile hub within a decade appears well nigh possible.

That India’s largest car-maker could favor Gujarat was indicated by the members of an MSIL delegation that called on Chief Minister Narendra Modi on September 8. “However, our Board will take a final decision by October-end”, a member of the delegation, led by Suzuki Motor Corporation Chairman Osamu Suzuki and MSIL Chairman R C Bhargava, had said.

Reacting to MSIL Board’s decision, Mr Modi welcomed Maruti Suzuki to Gujarat, saying it would accelerate the growth of the state's automobile sector.

"I welcome Maruti Suzuki's decision to come to Gujarat. Gujarat is moving ahead fast as Asia's auto hub. With Maruti, the pace will accelerate," Modi said.

For some time, the company was scouting for about 1,000 acres of land (including 500 acres for its vendors) in other states as well, including Maharashtra, for its proposed plant. The emergence of Sanand on the subcontinent’s automobile map, the existence of MSIL’s pre-export inspection facility at Mundra Port with a capacity of two lakh four-wheelers, and the recent labour-related turmoil in the Haryana-based manufacturing facilities, that caused huge losses to the carmaker, are counted among the factors that tilted the balance in favour of Gujarat, known for industrial peace, sources said.

In a statement, the company said on Saturday its Board has approved to purchase land in Gujarat to set up MSIL’s third manufacturing facility-after Gurgaon and Manesar in Haryana – in Mehsana district of Gujarat. “This purchase would be subject to final negotiations on price and all legal formalities being completed.”

Another important factor in Maruti Suzuki favoring Gujarat is the proposed Delhi-Mumbai Industrial Corridor (DMIC) with Japanese aid and loan worth $90 billion. About 38 per cent of the 1,483-km long industrial highway will pass through Gujarat alone, including Ahmedabad district. This would make transportation faster and cheaper.

Besides, MSIL is also said to favor the possibility of using Mundra Port both for exports as well as coastal navigation to reduce transportation costs to the southern states.

Maruti Suzuki will be the fourth major carmaker to set up a plant in Gujarat, the three others being General Motors, Tata Motors, Ford and Peugeot. Sources said Maruti Suzuki needed a larger chunk of land, probably to set up an entire township.

GM had set up its plant at Halol in the Panchmahals district close to Vadodara about a decade ago. In recent past, Tata Motors, which invested Rs 2,200 crore, had set up their plant in 1,100 acres of land, while Ford India got 480 acres and Peugeot 584 acres, both investing around Rs 4,000 crore in the newly-created industrial belt at Sanand.

Published on October 29, 2011
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