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Suzuki plant in Gujarat approved, minority shareholders nod awaited

Suzuki plant in Gujarat approved
Suzuki plant in Gujarat approved

If 50% of Maruti’s minority shareholders approve of the proposal, Suzuki can go ahead with its wholly owned manufacturing plant in Gujarat.

Following clearance of 16 amendments to the Company’s Act 2013 being cleared by the Rajya Sabha and replacement of Ordinary Resolution with Special Resolution, Suzuki can go ahead with its plans of setting up a wholly owned manufacturing plant in Gujarat.

Suzuki plant in Gujarat approved

Chief Minister of Gujarat, Shrimati Anandiben Patel at the foundation laying ceremony of the new Suzuki Plant in Gujarat earlier this year. The ceremony was held in the presence of H.E. Mr. Takeshi Yagi, Ambassador of Japan to India, Mr. Rajnikant S Patel, Home Minister of Gujarat, Mr. Osamu Suzuki, Chairman & CEO Suzuki Motor Corporation, Japan, Mr. R C Bhargava, Chairman, Maruti Suzuki India and Mr. Kenichi Ayukawa, Managing Director, Maruti Suzuki India at the Hansalpur premises.

The only thing now required by Suzuki is to get the nod of 50 percent of Maruti minority shareholders, who will be supporting the proposal; as against a minimum of 75 percent non related shareholders support under Special Resolution (before new amendment).

This has been confirmed by RC Bhargava, Chairman of Maruti Suzuki India Limited (MSIL) while the company will move ahead and set up the time table for voting on this matter. Last year, MSIL had transferred land for this upcoming plant in Gujarat to Suzuki which owns 56 percent stake in MSIL. Suzuki will be operating the plant while all cars produced from the facility will be sold by MSIL which will include costs plus profits.

Must See – Suzuki Gujarat Plant Site in Photos

Initially, minority shareholders vehemently opposed this move while the same was also contested by institutional investors, mutual fund and insurance companies fearing that this would bring down the company’s profit margins substantially. This caused the company to change policy wherein Suzuki will be supplying cars so produced at this plant to MSIL at no profit, no loss while Suzuki also offered to transfer this facility at book value to MSIL if needed.


A notice at the Suzuki plant site – August 2013. File Photo.

This is Suzuki’s first fully owned facility in India. Based in Mehsana, Gujarat, the plant is being constructed at an investment of INR 850 crores and will have initially capacity of 1 lakh units per annum by 2017.



About the author

Pearl Daniels

Pearl Daniels

Former freelance writer, Pearl Daniels is in the auto industry since 2011, having established herself as a widely read staff writer since 2013. Her keen eye for industry news, daily need to break down latest events, and quest to not miss a single launch detail, gives you the most refreshing morning news on weekdays.

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