Maruti Suzuki India Ltd (MSIL), which had signed a deal with the Gujarat Government for establishing a car manufacturing facility in Mehsana district, on Friday said it would now actually be a Suzuki facility that would make vehicles exclusively for Maruti.
“The entire investment (of Rs 4,000 crore) will be done by Suzuki. We will lease out the land acquired to Suzuki and are looking into the legalities involved. Also, we would rework the state support agreement (SSA) with the Gujarat Government,” Pankaj Narula, Executive Director (Service), MSIL, said here on Friday, after the launch of its new offering, Celerio.
Work on the project has started and it will become operational in 2017 as scheduled, he said.
Recently, the MSIL board of directors decided to entrust its Japanese partner Suzuki Motor Corporation (SMC) with implementation of the Gujarat project. Accordingly, the SSA would require rectification, which MSIL had signed with the State Government in 2011. SMC would implement the project through its 100 per cent subsidiary.
MSIL had, in 2012, acquired 640 acres of land in Becharaji and another 550 acres in Vithalpur. This includes both Government and privately-owned land.
This virtual outsourcing of the entire project to Suzuki, which owns 56 per cent in MSIL, would allow Maruti to focus more on product development and marketing. In fact, the Gujarat plant will be Suzuki’s first wholly-owned car manufacturing facility in India, although it will do so exclusively for Maruti. Clearly, Maruti will continue to have only two plants, at Gurgaon and Manesar in Haryana, where it makes 15 lakh vehicles annually.
The Gujarat plant will initially produce up to one lakh cars annually in 2017.