Suzuki's Gujarat manufacturing facility to become its 100 per cent subsidiary

Suzuki's expansion plans which were kept on hold due to the market conditions have been given a push now. The Japanese manufacturer will establish the Gujarat facility as a wholly-owned subsidiary of the company. This unit will come up in the next year.

The land for the production and related work will be leased by Maruti Suzuki. They had sanctioned the parent company’s proposal for the purchase of land in Mehsana district back in October 2011. This was for the further expansion of manufacturing facilities. On the lines of this strategy MSIL acquired about 640 acres of land in Becharaji and 550 acres in Vithalapur.

Osamu Suzuki, Chairman, Suzuki Motor Corporation, said, “The board of Maruti Suzuki has approved that a new company-Suzuki Motor Gujarat Pvt. Ltd.- will be set up. It will not be a listed company and will have a start-up capital of Rs 100 crore and be set up by April 2014 with the HO in Ahmedabad in the regional office of Maruti Suzuki. 

“The new company will only take care of production with vehicle marketing to be done through the Maruti Suzuki network. The benefits of the business will be shared by three partners- Maruti Suzuki India, Suzuki Motor Gujarat and SMC. At present, there are no plans to increase stake in Maruti Suzuki.”

RC Bhargava, Chairman, Maruti Suzuki, said, “Production will start in the new plant by end-2016 or early 2017 and it will produce 2,50,000 cars in the first phase. The estimated investment in the new plant is around Rs 3,000 crore (for the first phase of 250,000 cars).”

Source: NDTV Profit