Maruti Suzuki India clears concern over Gujarat plant

The discontent between Maruti Suzuki and Suzuki Motor Corporation is all over the news since the time the latter announced to set up a new fully-owned manufacture facility in Gujarat. But this did not go well with stakeholders of Maruti -Suzuki India Limited who felt the Indian arm will be tagged as a distributor rather than a manufacturing company.

The management of Maruti Suzuki has come forward and is trying its best to calm the stakeholders and investors. The company on Monday said Suzuki Motor Corp's subsidiary in Gujarat would operate on the basis that while it would not make any losses, it would also not accumulate any cash surpluses.

The Gujarat plant will be set up with an investment of Rs 3,050 crore and is expected to be operational by 2017. The company has said that cost of production of vehicles, produced in this new plant would be calculated in the identical manner to that followed by MSIL in Haryana and as would have been done if the Gujarat project has been executed by a 100 per cent subsidiary of MSIL. 

The official statement also said that if the contract manufacturing agreement expires and in any case is not extended by mutual consent, then the assets of Suzuki’s new unit would be transferred to Maruti Suzuki at a fair value, which will be determined by doing individual evaluation.