Maruti Suzuki to invest Rs 4,960 crore for new plant in Gujarat

Maruti Suzuki's board approved acquiring land in Gujarat for a new plant with an initial investment of Rs 4,960 crore. This expansion aims to add up to 1 million units of production capacity to meet growing domestic and export market demand.

Maruti Suzuki India Limited (MSIL) announced on Monday that its Board of Directors approved the acquisition of land at the Khoraj Industrial Estate in Gujarat for the expansion of its production capacity.

The company intends to acquire the land from the Gujarat Industrial Development Corporation with an initial investment of Rs 4,960 crore, according to a regulatory filing. This investment covers the cost of land acquisition, development, and preparatory activities as the automaker seeks to address growing market demand in both domestic and export sectors. The regulatory filing indicates that the proposed capacity addition aims for up to 1 million units.

Current Capacity and Rationale for Expansion

Currently, the company's existing production capacity stands at approximately 24 lakh units per annum across its facilities in Gurugram, Manesar, Kharkhoda, and Hansalpur. The company noted that it maintains a capability to produce 26 lakh units per annum, a figure that includes units produced at the erstwhile Suzuki Motor Gujarat Private Limited, which recently amalgamated with the company. The decision to expand follows the full utilization of Maruti Suzuki's current production facilities.

Project Timeline and Funding

While the Board approved the land acquisition and the associated preliminary costs, the specific timeline for the installation of the new capacity remains under finalization. The filing stated that the period within which the proposed capacity is to be added will be "finalised and approved by the Board while framing the phases of installation of capacity."

To fund the expansion, the company plans to utilize a "combination of Internal Accruals & External Borrowings." The total investment required for the project will be further detailed as the Board outlines the specific phases of the capacity installation. The rationale provided for this capital expenditure is to support "growth in market demand including exports." (ANI)

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