Maruti Suzuki looks for land in Gujarat to commence second phase of Hansalpur project

The largest car maker of India, Maruti Suzuki India Limited (MSIL) has asked Gujarat state government to provide more land for Phase Two of its manufacturing plant at Hansalpur, located near Mehsana. The auto major signed the deal to setup the plant with the state government just two weeks ago. 700 acre of land has been allotted to the company at the site, which is situated at a distance of about 100 km from Ahmedabad.

A senior government official, who wished to remain anonymous, confirmed, "Yes, Maruti is looking for another land parcel of around 300 acres for phase two of the project. It could be used to house the company's vendors or for the company's own capacity expansion plans." He further said that the land would not be located right next to the Hansalpur plant, but around 10-12 km away.

On June 2, 2012 MSIL and Gujarat state government inked a State Support Agreement (SSA) to acquire land in proximity of Mehsana. The car maker announced an initial yearly production capacity of 2,50,000 units, which is to be achieved by 2015-16 with an investment worth Rs. 4,000 crores. The plant in the second phase of the project will further increase the car maker's combined production capacity to 2 million vehicles within 3-4 years. After Plant C at Manesar becomes operational by 2013-14, the combined annual net installed capacity of Gurgaon and Manesar plants will touch 17.5 lac units.

Gujarat Chief Minister, Narendra Modi was visited by Managing Director (MD) and Chief Executive Officer (CEO), MSIL, Shinzo Nakanishi as well as Chairman, MSIL, R.C. Bhargava in May 2011. The purpose of this meeting was to discuss the possibility of establishing the company's first manufacturing unit outside of Haryana.

While signing the SSA, Nakanishi expressed that Maruti will enter a new phase of corporate life with its first plant in Gujarat. It is expected that the auto industry will cross the milestone of four million vehicles by 2015-16. So, the new plant will play an important role for the company if it aims to regain its erstwhile 50 per cent market share in the passenger car segment of the Indian market.