Maruti all-set to expand through Gujarat

Saturday 29 October 2011, 09:51 AM by

Gujarat would be getting a huge reason to rejoice soon, owing to the intensive drive carried by the country’s largest automobile company, Maruti Suzuki India Limited, to recuperate from the severe fall it has experienced in the past few months. The board meeting of the currently deteriorating company is scheduled on Saturday, wherein the company is likely to announce the results of its performance of the second quarter. The Maruti board is also expected to officially give a green signal to the Gujarat plans of the company.

The company had stated some time back, that it would invest around Rs. 18,000 crore, including 6,000 crore from ancillary units, for the purpose of expansion. Representatives from Maruti as well as parent company Suzuki have already taken an effective step towards the set goal by meeting Gujarat Chief Minister Narendra Modi.

Maruti Suzuki has been struggling to settle down things, owing to the labour union trouble that disrupted the production at the Manesar plant in Haryana, since June this year. Subsequently, the company has suffered a production loss of at least 50,000 units and a revenue loss of approximately Rs. 1,750 crore till now.

According to the sources, the company is vehemently in search of an alternate location for its next round of expansion. Gujarat, with the best-suited infrastructure and business-friendly policies offered by the government, emerges as the consummate option for the proposed plant of Maruti. Last month, a team from Maruti Suzuki, led by Suzuki Motor Corporation Chairman Osamu Suzuki, Maruti Suzuki Chairman R. C. Bhargava, and Managing Director Shinzo Nakanishi met Chief Minister and state government officials.

The success spree of Gujarat started with the expansion efforts of Tata Motors, followed by Ford and Peugeot. And if Maruti Suzuki steps on the Gujarat soil, it is likely to set up a plant at Bahucharaji near Mehsana.

Maruti Suzuki Chairman R.C Bhargava had confirmed during his visit to Gandhinagar that the company would invest Rs. 6,000 as a part of the first phase, to set up a plant capable of producing 10 lac cars per year. A similar amount would be invested in the second phase for boosting the capacity, while an additional amount of Rs. 6,000 crore would be invested in the third phase for the vendors’ park.