India’s largest passenger car maker Maruti Suzuki has commissioned the first phase of its new plant in Kharkhoda, Harayana, with an initial capacity of 250,000 units and has started commercial production at the facility on Tuesday.
The Kharkhoda plant in the Sonipat district of Harayana is Maruti Suzuki’s fourth manufacturing plant in the country, including the recently acquired Suzuki Motor Gujarat (SMG) plant, and the third one in Haryana.
Before the Kharkhoda plant, Maruti Suzuki had an annual production capacity of around 2.35 million units across three plants – two in Haryana (Gurugram and Manesar) and the SMG.
The automaker had said it would double the capacity to 4 million units by 2030-31 with an investment of about Rs 45,000 crore as it looks to regain a 50% market share.
The additional 2-million-unit capacity will be split between the Kharkoda plant, where the capacity will be eventually expanded to 1 million units, and a new factory that is being planned in Gujarat.
The company’s SMG facility in Gujarat, which it acquired from Suzuki Motor Corp last year, has a capacity of 750,000 units per annum across three production lines. There were also reports that it would set up a fourth production line with a capacity of an additional 250,000 units there.
Recently, Suzuki Motor said that there is a need to “rethink its strategy” in India as the business environment in the country has changed due to its declining market share and intensified competition in electric vehicles in the country.
The parent company of Maruti Suzuki said it will invest close to Rs 70,000 crore in India over the next five years as it seeks to reverse market share losses in India.
The automaker plans to strengthen its product capabilities and lineup in the SUV and MUV segments, while rapidly developing and introducing entry-segment products that meet the preferences of entry-level customers.
At the same time, Suzuki Motor has also revised its long-term sales outlook for its Indian subsidiary downwards by 15% amid a slowdown in the the entry car segment. The company is now projecting a volume of 2.54 million units by 2030-31 in India, as against the 3 million units target announced earlier.
Separately, with the introduction of its first electric vehicle, Suzuki is looking at India as the hub for exporting electric vehicles. Suzuki Motor expects India to remain its fast-growing market and increase the country’s share in the automaker’s global sales to 60% by the end of the decade from 56% in the previous financial year.