No immediate plans to set up plant in Gujarat: Bajaj


Two-wheeler major Bajaj Auto, which was looking for land in Gujarat to set up its fourth plant, has now said the company has no immediate plan to set up a plant in the state.

In June 2011, Managing Director Rajiv Bajaj had expressed interest in initiating discussions with Gujarat Chief Minister Narendra Modi to secure about 400-500 acres adjoining the Mundra port to set up a manufacturing facility. However, when contacted, Bajaj said the company had not taken any decision yet.

Investment in the proposed plant, with a capacity of five million units a year, was estimated at about Rs 1,000 crore. So far, however, the company has not approached the state government for land.

“We are not in talks with any official from Bajaj Auto. So far, they have not approached us,” said an official from the state industries department. When contacted, a senior Bajaj Auto executive said, “We have no immediate plan to set up a plant in Gujarat.”

At present, Bajaj Auto has a capacity of five million units, divided among its plants in Maharashtra and Uttarakhand. Together, the Chakan and Aurangabad plants in Maharashtra manufacture about 3.5 million vehicles a year, awhile the Pantnagar plant in Uttarakhand has a capacity of 1.5 million vehicles a year. The company plans to double its capacity to 10 million units a year, and is, therefore, eyeing a fourth plant.

Since Tata Motors shifted its Nano project to Sanand in Gujarat, the state has seen a slew of auto majors making a beeline for land in the state. Ford India has started work at its Sanand plant. The company would invest Rs 4,000 crore to set up a facility to manufacture 2,40,000 vehicles and 2,70,000 engines a year.

French carmaker PSA Peugeot Citroen has also acquired 600 acres in Sanand and plans to manufacture 1,65,000 vehicles a year from its plant being set up there.

The latest entrant, Maruti Suzuki, has been allotted 700 acres at Hansalpur near Mehsana. In the first phase, the company would invest Rs 4,000 crore to set up a 2,50,000-units-a-year plant by 2015-16. Maruti is already looking for additional land of about 300 acres for the second phase of the project.

Bajaj Auto has been involved in a Rs 1,100-crore sales tax refund case with the Maharashtra government. Industry sources feel the tussle might have led to the company trying to secure land outside the state.