Maruti Suzuki India (MSIL) on Friday said it has been allotted 800 acres in Sonipat district of Haryana, for a new plant, in which the company will invest ₹11,000 crore in the first phase.

The company had been in discussion with Haryana government for long, to shift from the Gurugram facility and invest in a new manufacturing site for its proposed capacity expansion.

“The company completed the process of allotment of an 800 acres site at IMT Kharkhoda in district Sonipat with HSIIDC (Haryana State Industrial and Infrastructure Development Corporation Limited). In the first phase, the investment will be over ₹11,000 crore. The site will have space for capacity expansion to include more manufacturing plants in the future,” MSIL said in a filing to stock exchanges.

Current cumulative capacity 5.5 lakh vehicles

The first plant with an initial manufacturing capacity of 2.5 -lakh vehicles per annum is expected to be commissioned within the year 2025 subject to administrative approvals, it said.

Currently, MSIL has a cumulative production capacity of around 5.5 lakh units per quarter or about 22 lakh units per annum across its manufacturing plants in Haryana (total 15 lakh units per annum) and Gujarat (7.5 lakh units per annum).

The company’s priority was to find a new site due to difficulties of functioning within the existing 300-acre compound, especially after the area turned into a bustling megapolis over the years.

However, when asked about the shift, Rahul Bharti, Executive Director, Corporate Affairs, MSIL, told BusinessLine that, “As of now, this is an expansion project and incremental capacity. We are not increasing production in Gurugram plant; it will be a product flexible plant where any model can be manufactured.”

For the supply chain also, Bharti added, “In the immediate future, we will procure from the current suppliers, but over a period of time the supply ecosystem will also be developed in the new plant area.”