Maruti Suzuki India Ltd, India's largest passenger car maker, is on its way to create a production capacity of 1.5 million vehicles per annum in Gujarat, which would be close to the company's net installed capacity in the country now.
The car maker had earlier announced that the Gujarat plant would have an initial annual capacity of 250,000 units in a phased manner, and that future expansion would depend on market conditions.
Maruti Suzuki currently has an installed capacity of 1.75 million vehicles per annum at Gurgaon and Manesar plants (in Haryana) combined. This is including the Manesar C plant, which is expected to go onstream in 2013.
"We are planning to have three plants or assembly lines at the first site, with a combined installed capacity of 750,000 units per annum. After we exhaust capacity at the first site, we will move on to the second site, which has been privately acquired by us," said R C Bhargava, chairman of Maruti Suzuki.
When asked about the capacity at the second site, Bhargava said: "As a standard practice, at one site we do not wish to build a capacity more than 750,000 units per annum. Therefore, the second site would also have something around that (installed capacity)." He, however, added production could be more than the installed capacity working in multiple shifts.
A senior state government official, however, claimed that the second site would house the main plant, and that it will have higher capacity than the first plant.
Maruti was allotted 640 acres by the state government from its land bank. It has recently acquired around 600 acres for the second plant, around 40 km from the existing site at Hansalpur.
"Maruti's second plant will be set up near Mehsana and about 40 km away from its first unit. The company has already acquired 600 acres of private land. While the first site will also have vendors park, the second site would be used by the company itself. There will be no vendors park in the second location," said M Sahu, principal secretary at the Gujarat industries department.
Construction at the first site is likely to start in the first quarter of 2013. "The construction at the first site will start in the January-March quarter. The second plant would be constructed after commissioning the first plant over the next two-three years," Sahu said. "If the company requires further land, they can buy private land, where we can help in land acquisition."
Maruti's production in Gujarat would be both for exports and domestic sales, Bhargava confirmed. "We are yet to decide on the exact product mix, and the ratio of exports," he added.
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