Maruti Suzuki to invest ₹5,000cr in Gujarat for capacity expansion
What's the story
India's leading automaker, Maruti Suzuki, has announced a massive investment of ₹4,960 crore to acquire land in Gujarat. The move comes as part of the company's strategy to expand its vehicle production capacity. The land will be acquired from the Gujarat Industrial Development Corporation (GIDC) at Khoraj Industrial Estate and is expected to support an additional capacity of up to one million vehicles per year.
Strategic approach
Plans to be finalized in phases
The exact timelines and total capital expenditure for this expansion will be decided later, as Maruti Suzuki plans to implement the project in phases. This decision comes as the company's factories are already operating at full capacity. Currently, Maruti Suzuki has an installed capacity of around 24 lakh units per year across its plants in Gurugram, Manesar, Kharkhoda, and Hansalpur with a production capability of 26 lakh units, fully utilized at present.
Growth strategy
Expansion driven by market demand and exports
The proposed expansion is mainly driven by a surge in market demand, including exports. Maruti Suzuki plans to fund the land acquisition, development, and preparatory work through a mix of internal accruals and external borrowings. The company has established a strong manufacturing base in Gujarat over the years, using the state for domestic production as well as exports.