The new project planned for Gujarat facility is codenamed YCA, which is the next generation WagonR, to be offered in 5 and 7 seater variants. The former will compete with cars like Renault XBA, Tata Kite, Hyundai Eon Kappa and Datsun Go, while WagonR MPV will have Datsun Go+ MPV in its cross hairs.
Prototype of Maruti YCA will be built and commence testing in January 2017, while mainstream production will kick off in May. First car for customer will roll out in mid-2017.
New production house in Gujarat will be selling cars to Maruti Suzuki, since the latter has no stake in the facility. Initial proposal stated that cars will be sold to MSIL at a high profit, and when the plant is to be merged or transferred to MSIL at a later date, Suzuki will sell it for a premium. Plus, there were concerns about how Maruti Suzuki is going to utilise the surplus cash which was intended to go into the plant at first.
Now it is settled that Gujarat plant will sell cars to Maruti at no-profit no-loss, and the plant will be merged or sold to MSIL at strictly book value. Maruti has also said that surplus cash will be used for new product development, marketing infrastructure, and the like, and further remains shall boost the dividend up in the future.
The ballot that was earlier scheduled for October 2014 will be initiated once the amended Companies Bill is passed in Rajya Sabha, and the minority shareholders’ approval limit is lowered to 50 percent from 75 percent. The company expects full support from the minority given that the new proposal is unique and favourable to them, but there seems to be some scepticism because of letting the parent company invest wholly here.
Via – Economic Times