Maruti Suzuki Plans to Set Up New Manufacturing Plant to Meet Increased Demand

Maruti Suzuki India (MSI) has announced plans to build a new manufacturing plant with a capacity of up to 10 lakh units per annum to cater to the expected increase in demand from domestic as well as export markets. The company has earmarked a capex of around Rs. 8,000 crore for the current fiscal year, but the amount of investment in the new plant and its location are yet to be finalised.

Details of the Plan

MSI’s board has given in-principle approval for the creation of up to 10 lakh vehicles per year capacity in the new plant, which is expected to come up in phases depending upon the market situation. The new facility will be in addition to its upcoming manufacturing plant in Sonipat in Haryana, and work on the new plant would be carried out simultaneously with the Sonipat plant.

MSI is investing Rs. 11,000 crore in the first phase of the Sonipat plant with an initial manufacturing capacity of 2.5 lakh units per annum, expected to be commissioned by 2025. The company plans to fund the new investment through internal accruals, and the expected investment on the new plant could be slightly higher than that on the Sonipat facility.

Collaboration with Toyota

Maruti Suzuki Chairman RC Bhargava has announced that the company will be getting a “big three-row strong hybrid model” from Toyota as part of their collaboration. Besides, the company aims to have six fully electric models in its portfolio by 2030, mostly in the SUV category.

MSI’s Existing Production Capacity

MSI’s total existing production capacity is around 15 lakh units per annum in Manesar and Gurugram, and it is the sole beneficiary of 7.5 lakh unit capacity of Suzuki Motor Gujarat (SMG) under a contract manufacturing agreement. Besides, it will be getting 10 lakh capacity from the Sonipat plant.

Maruti Suzuki’s move to set up a new manufacturing plant with a capacity of up to 10 lakh units per annum is to cater to the expected increase in demand from domestic as well as export markets. The company is investing heavily in the new plant and the Sonipat plant to meet the growing demand for its vehicles. Its collaboration with Toyota and plans for electric vehicles show that Maruti Suzuki is committed to growth and innovation in the automotive sector.