Maruti to acquire land for new plant


The country's largest car maker Maruti Suzuki India expects to complete land acquisition for a plant in Gujarat in a month but has no immediate plan to start construction work there, a top company official said.

Maruti Suzuki India Chairman R C Bhargava said they will initiate work at Gujarat plant only when the capacity of its Manesar plant would be fully utilised.


"Land acquisition process is on and we hope it will be concluded in this month. I don't think we will start work on it for some years from now at least two to three years. We should see the market situation," Bhargava said on the sidelines of a seminar at Indian School of Business here.
"We will need Gujarat plant when the Manesar plant capacity is fully utilised. So, that depends on how the market grows. So, I can't give a date on this," he added.

The company has two facilities at Gurgaon and Manesar, both in Haryana, with a collective capacity to manufacture 1.2 million vehicles annually.

According to a senior official of Gujarat Government, the initial land requirement of MSI was indicated to be 1,000 acres.

The MSI board had also given the nod to purchase of up to 1,500 acre of land in Mehsana district, Gujarat. The auto major had stated in June that along with its vendors, it could invest Rs 18,000 crore in the state as it looks to manufacture nearly 20 lakh units a year in Gujarat.

"We have to see how the market goes. It takes three years to build a new plant. So, if I need to take production from Gujarat plant in 2016, then I will have to start work in 2013.

"Nobody can create capacity when market does not require. We create capacity to make and sell cars. So if there is no demand for cars I don't have to create that capacity," Bhargava said.

On the automobile industry, Bhargava said now the outlook for the industry is not bright. Maruti this year may end up less than last year's sales.

"I cannot tell in terms of percentage because there are four more months to go. Lets see how these four months to go. Chances are will be less than last year," he said.

Till November this year, MSI sold 6,81,200 units down by 17.8% over last year same period. Exports declined by 24.4% to 73,783 units till November.