MSIL to double production output with Mehsana facility

Tuesday 28 August 2012, 10:48 AM by

According to a report, Maruti Suzuki India Limited (MSIL), the country's largest passenger car maker, could be doubling its annual production output when the company's upcoming new facility in Mehsana commences operation. Mehsana is a small village about 100 kilometres from Ahemdabad, Gujarat.

The report appeared on August 24 after Osamu Suzuki, Chairman, Suzuki Motor Corp. (SMC) met Narendra Modi, Chief Minister, Gujarat. The Chairman has been on a week long Indian visit to refurbish the company's public relations after the much despised Manesar incident and to sort out details of the new project conceived by the Indo-Japanese alliance.

Report suggests that MSIL's new Gujarat facility could begin production by 2015-16 and at that time would be the company's largest manufacturing plant outside Haryana. MSIL currently has its production facilities in Gurgaon and Manesar, both situated in Haryana.

According to Dow Jones Newswires, a senior Gujarat government official revealed that MSIL's Gujarat facility will exceed its initial expectation and yield about 500,000 vehicles each year (twice as what Maruti planned initially).

Reportedly, the Gujarat plant will be built at a cost of a whopping Rs. 4,000 crore ($ 727 million). Gujarat government has earlier announced its full support and cooperation to the new project with the CM Modi taking a personal interest in the development. In an effort to win the heart of Suzuki Chairman, Modi flew to Japan in July and reportedly, was successful in persuading the Suzuki Head to bring the new project to Gujarat.

Osamu Suzuki has very publicly expressed his respect for MSIL which accounts for the Japanese auto major's one-third before tax profits and over 50 per cent of its unified production outside its home turf. Accordingly, MSIL is very critical for the SMC global operations and revenues.

When questioned about the reported production capability of the Mehsana factory, a MSIL spokesperson refused to provide any comment. MSIL is still recuperating with the PR nightmare after Manesar incident and with the facility resuming its operations on August 21 at less than 10 per cent of its average daily output, the company is taking every precaution to not start any new outrage and achieve normalcy as soon as possible.

The new facility in Mehsana in Gujarat appears promising as the state is regularly cited as one of the most progressive states in India and also has the longest coastline among all the states that could be very convenient for MSIL in easing its export and import operations. Gujarat also has recently been identified as a automotive hub with several auto majors like Tata Motor, General Motors and Ford also establishing their production units in the state.