Maruti Suzuki aims high with its fourth plant in Gujarat

Tuesday 29 January 2013, 18:31 PM by

Maruti Suzuki, India’s biggest passenger car maker, has been in news for some time off late, owing to a land purchase for setting its fourth production unit. With this proposed plant, the car maker will establish its second plant in Gujarat. Reportedly, with its fourth plant, the auto maker is planning to two-fold its annual production, resulting to around 3 million units.

The new unit of Maruti Suzuki India Limited (MSIL) is anticipated to feature a production capacity of close to 7,50,000 units each year. Industry experts believe that this plant will help the auto maker to increase its shipments to Middle East and Europe, owing to the close proximity of its new plant with sea.
Meanwhile, the country’s second largest car exporter has also started the work on its third facility in Mehsana district of Gujarat, which is expected to start its operations by the end of 2015. The auto maker currently has two manufacturing plants in the Indian auto sector, based in Manesar and Gurgaon. With these units, the auto maker rolls out around 14.5 lakh units each year. After adding the production capability of its third plant, the figures are expected to reach close to 22 lakhs units annually. Reportedly, after the commencement of MSIL’s fourth plant, these figures will cross the 30 lakh mark.
Coming to the financial position of the auto maker, Maruti Suzuki has recently declared a significant jump of 144 per cent in its quarterly sales. It must be noted that this was the first time that the profits of auto maker reported an increase during the last 18 months. Reportedly, the unrest at its Manesar unit not just dented the position of MSIL in the auto industry, but also affected its profits at a big note.
Besides, the auto maker is also witnessing a critical legal allegation by the Haryana State Industrial and Infrastructure development Corporation Limited. The government entity is demanding an additional compensation of around Rs. 501 crores for the additional piece of land that MSIL acquired in Manesar. It must be noted that the auto maker did not revealed the size of additional land area or any information regarding the total amount of compensation, which is to be paid to the owners of mentioned land.
On the other hand, in this respect, Maruti Suzuki had issued two notices. The first notice came to the limelight in March 2012, whereas the second notice was received in June 2012. Reportedly, the final hearing of the case is pending, but the auto maker has been asked to make the total consideration in five half yearly instalments, following an interest charge of 11 per cent on the unpaid amount.