Maruti Suzuki to invest Rs 38,200 crore in Gujarat, to add 1.25 million units in capacity

Toshihiro Suzuki, global CEO of Suzuki Motor Corporation said that Maruti Suzuki will make an investment of Rs 38,200 crore in Gujarat; to make  additional 1.25 million units of production capacity in the state. 

Maruti Suzuki will be investing Rs 3200 crore in setting up 2.5 lakh units of electric vehicle production capacity in Suzuki Motor Gujarat and additionally Rs 35,000 crore in setting up of 1 million units capacity by Maruti Suzuki. 

Addressing the gathering at 10th Global Summit of Vibrant Gujarat, Suzuki said, thanks to Prime Minister Mr Modi's "progressive approach" and India's growth, “We will invest in the future. Firstly, the first battery electric vehicle from Suzuki Group will be rolled out from Suzuki Motor Gujarat by the end of the year. We plan to sell this model not only in India, but also export to Japan and European countries."

Secondly, the company will expand its BEV production in the future. Suzuki Group will invest Rs 3200 crore in Suzuki Motor Gujarat to add a new fourth production line which can produce 2.5 lakh units per year. This will increase the annual production capacity of Suzuki Motor Gujarat from the current 7.5 lakh units to 1 million units.

He reminded that under the leadership of  Narendra Modi, the Indian automobile market has been expanding steadily, as a result, India has become the third largest market in the world.

"We have also scaled up production capacity substantially in India when compared to ten years ago. We expect 1.7 times in vehicle production, 2.6 times in exports in the current fiscal year," stated Suzuki. 

“We will invest Rs 35,000 crore for the construction of the second car plant in Gujarat which would produce another 1 million units per year. As a result, the annual production capacity in Gujarat will be 2 million units, namely, 1 million units at SMG and 1 million units at the second new plant,” stated Suzuki, sharing the Japanese car maker's long-term commitment to the state and the country. 

Gujarat is emerging as one of the preferred locations for automakers to set up their manufacturing facilities over the last decade, posting stiff competition to Tamil Nadu, Maharashtra and National Capital Region which are major automotive clusters.

The state’s business friendly environment, close proximity to the western coast facilitates easy export and import of vehicles and parts. Apart from Maruti Suzuki, automakers, including Tata Motors, MG Motors, Mahindra & Mahindra and Hero MotoCorp have manufacturing plants in the state.

Setting up of a new EV facility by Maruti Suzuki along with Tata Motors Sanand factory which will be primarily for electric vehicles helping the state emerge as a key electric car hub in the country. Tata group’s cell manufacturing arm Agratas too has committed over USD 1.3 billion in the state.

Beyond electric, Maruti Suzuki is looking at different alternatives to reduce greenhouse gas emissions.

“As far as reduction of greenhouse gas emission is concerned, our efforts will be through a multi-pathway approach. That means in addition to vehicle electrification, we will offer multiple options such as CNG, biogas, bio ethanol and green hydrogen. Taking advantage of animal wealth, we will start production of biogas from cow dung. Together with the National Dairy Development Board and Banas Dairy, Suzuki has already started construction of the fourth biogas plant in Gujarat,” Suzuki said.

Maruti Suzuki currently has two manufacturing facilities, one in Manesar and another in Gurugram, apart from the Suzuki Motor Gujarat factory, which the company is acquiring from its Japanese parent company Suzuki Motor Corp.

Maruti Suzuki has plans to ramp up its output to four million units by 2030-2031. Currently, it produces around 1.3 million vehicles per annum across its plants in Manesar and Gurugram. Suzuki Motor Gujarat can produce around 7,50,000 vehicles.

“Right now, we have almost 2.2 million unit capacity together with Suzuki Motor Gujarat. And this production capacity should go beyond four million units. For that, almost two million additional capacity is required. So that much investment we have to do," Managing Director and Chief Executive Officer of Maruti Suzuki, Hisashi Takeuchi had said earlier.

Apart from the newly announced Gujarat plant, the capacity expansion is being carried out at Kharkhoda, Haryana. Maruti is investing Rs 18,000 crore for the Kharkhoda plant, where the company plans an annual production capacity of up to one million vehicles. The first phase of the Kharkhoda plant with a capacity of 2,50,000 vehicles per year is expected to be commissioned by 2025.

Maruti Suzuki currently has 18 models in its portfolio. The carmaker will launch its first battery electric vehicle in India toward the end of this year,  and plans to bring five more electric vehicles by the end of the decade.

Parent company Suzuki Motor Corp has already announced plans to invest 4.5 trillion yen (Rs 2.82 trillion) globally on its electrification drive by 2029-30. 

With inputs from Shahkar Abidi and Amit Vijay M.