Maruti Suzuki India Gujarat plant land acquisition nears closure: Vehicle production will not commence immediately

While Maruti Suzuki India is almost there in terms of land acquisition which is roughly 1,000 acres for their Gujarat plant, there’s no clarity yet regarding when the MSI plant construction will commence. Maruti investment figures could be a pssible Rs 18,000 crore in Gujarat where the company looks at production of 20 lakh units a year.

Chairman R Bhargava did mention that work on the Gujarat plant would only begin once the Manesar plant is at full production capacity. In his words, “Land acquisition process is on and we hope it will be concluded in this month. I don’t think we will start work on it for some years from now at least two to three years. We should see the market situation.”

“We will need Gujarat plant when the Manesar plant capacity is fully utilized. So, that depends on how the market grows. So, I can’t give a date on this.”Maruti Suzuki India currently operates out of two plants. The Manesar and Gurgaon MSI plants have an overall production capacity of 1.2 million vehicles per annum.

“We have to see how the market goes. It takes three years to build a new plant. So, if I need to take production from Gujarat plant in 2016, then I will have to start work. “Nobody can create capacity when market does not require. We create capacity to make and sell cars. So if there is no demand for cars I don’t have to create that capacity.”

The Indian auto market hasn’t enjoyed robust sales figures in Q4 of 2012 with a number of car manufacturers expressing concern regarding their inability to achieve sales growth and targets for 2012. Maruti has battled production loss days at end this year, and has so far sold 6, 81,200 units in 2011. In a YOY comparison, this is lower by 17.8% when compared to January-November 2012. MSI exports were lower by 24.4% and account for 73,783 units till November 2011.