Maruti Suzuki Board Approves Land Acquisition for Major Capacity Expansion

Maruti Suzuki India Limited's Board of Directors has approved the acquisition of land at Khoraj Industrial Estate in Gujarat for expanding its production capacity, the company informed stock exchanges on January 12, 2026.

The automaker plans to add capacity of up to 1 million units at the new facility, which will be developed on land acquired from the Gujarat Industrial Development Corporation. The Board has approved Rs 4,960 crore for land acquisition, development, and preparatory activities.

The expansion comes as the automaker grapples with a capacity constraint, with production across all its plants—Gurugram, Manesar, Kharkhoda, and Hansalpur—running at maximum capacity. This has left the company with limited room to respond to growing market demand and could potentially impact delivery timelines for customers.

Currently, Maruti Suzuki operates with a total capacity of approximately 24 lakh units per annum across its existing facilities, with the capability to produce 26 lakh units annually. This includes units from the erstwhile Suzuki Motor Gujarat Private Limited, which has been merged with the company. According to the regulatory filing, the existing capacity is fully utilized, necessitating the expansion.

The company cited growth in market demand, including exports, as the rationale for the capacity addition. The additional 1 million units will provide much-needed breathing room for India's largest passenger vehicle manufacturer.

Gujarat has emerged as a strategic location for automotive manufacturing in India, offering several advantages that make it an attractive destination for expansion. The state provides proximity to major ports like Mundra and Kandla, facilitating easier exports to international markets. Additionally, Gujarat's pro-business policies, well-developed industrial infrastructure, and skilled workforce have made it a preferred hub for automobile manufacturers. Maruti Suzuki already has a significant presence in the state through its Hansalpur facility, making Khoraj a logical choice for further expansion.

The expansion comes at a time when Maruti Suzuki is looking to strengthen its export footprint alongside meeting domestic demand. India's automobile exports have been growing steadily, and manufacturers are increasingly viewing the country as an export base for global markets, particularly in Africa, Latin America, and Southeast Asia. The additional capacity of 1 million units will provide Maruti Suzuki with greater flexibility to serve both domestic and international customers, helping the company capitalize on emerging export opportunities.

The new facility is expected to generate substantial employment opportunities in Gujarat, both directly in manufacturing operations and indirectly through the automotive supply chain ecosystem. Large-scale automotive plants typically create thousands of jobs during construction and operation phases, while also supporting ancillary industries, component suppliers, and service providers in the region.

The expansion aligns with the Indian government's push to make the country a global manufacturing powerhouse under the Make in India initiative. The automotive sector has been a key beneficiary of various policy measures, including the Production Linked Incentive (PLI) scheme for automobiles and auto components, which aims to boost domestic manufacturing and exports. The government's focus on electric vehicle adoption and stricter emission norms is also driving automakers to invest in new production facilities equipped with modern technology to meet evolving regulatory requirements and consumer preferences.

The timeline for adding the proposed capacity and the total investment required will be finalized and approved by the Board while framing the phases of installation. The expansion will be funded through a combination of internal accruals and external borrowings.

The development marks a significant step in Maruti Suzuki's expansion strategy as the company seeks to maintain its leadership position in India's rapidly growing automotive market while building capacity to serve international customers.