Maruti Suzuki India will continue to invest in Haryana unless the state reservation policy plays any hindrance
Maruti Suzuki has shifted the production of its subcompact sedan Dzire from Manesar to Suzuki Motor Gujarat (SMG). This was a routine update. SMG is a wholly-owned subsidiary of the parent company Suzuki in Hansalpur district in Gujarat. It has now come to light that the company will shift its manufacturing base completely to a new facility.
The largest carmaker in the country is lining up Rs 18,000 crore to invest in a new factory site in Haryana. This will be the single largest investment in India for an automotive plant. In full operation, this facility will have a peak production capacity of 10 lakh units annually. The development was confirmed by Maruti Suzuki chairman R.C. Bhargava.
Biggest single-location automobile plant
The new manufacturing plant in the greenfield location is likely to be spread over 700-1,000 acres and would replace the older (and first) facility based in Gurugram. The plans for building this new plant had been initially delayed due to the outbreak of novel coronavirus last year.
The company has decided to shift from its current Gurugram facility, which is spread over 300 acres, due to space constraints. Since the premises fall around residential areas, local residents face a lot of hardships due to heavy vehicular movement.
Bhargava was quoted saying, “We have a plan to invest Rs 17,000-18,000 crore. The total capacity that we are planning is between 7.5 lakh and 10 lakh cars per annum. This is the scale that we are looking at.” He further added that the company “would like to shift quickly” to the new location once it is completely built. The new plant will be world class and manufacture existing as well as upcoming new gen cars from the company.
Challenges Ahead
However, there are a series of challenges ahead for Maruti before shifting its base to its upcoming largest single-location automobile manufacturing plant. The most notable of them being the Haryana Government’s recent policy which allows corporates to reserve 75 percent of jobs for locals of the state. The company chairman was quoted saying, “We are concerned about it. We are talking to them, (and) asking the state government to work out a solution, which can make everyone happy.”
It has also come to light that other states have also approached the company for a large investment. However, Maruti is keen to invest in Haryana, unless the local reservation policy plays a major spoiler.
The company is currently maximising the efficiency of production at its two plants at Haryana and the parent Suzuki’s SMG plant, keeping in mind the demand of its multiple models. Earlier, Bhargava cleared the air by stating that plants in Haryana will continue to work in full capacity and Maruti Suzuki is neither shifting investments nor jobs by shifting production of Dzire from Haryana to Gujarat.
