Maruti plans third unit at Manesar; may invest Rs 1,700 cr

The country's largest carmaker Maruti Suzuki India (MSI) is planning to set up a third production unit at its Manesar facility that could entail an investment of Rs 1,700 crore.

According to sources, company is looking to add an annual capacity of 2.5 lakh units, similar to the ongoing second unit at Manesar.

When contacted, Maruti Suzuki India Chairman R C Bhargava told PTI: "We are preparing a project report for the third unit in Manesar, which will come up for discussion before the board. The unit is proposed to have a capacity of 2.5 lakh units annually."

Without giving any time-frame, he said the project report is expected to be completed soon but declined to comment on whether the report stood a chance to be discussed in the company's next board meeting scheduled in October.

Asked about investment Bhargava said, "It will be in a similar range of the second unit which is currently being set up at Manesar."

The company's Manesar plant has annual production capacity of 3 lakh units, while the Gurgaon plant produces 7 lakh units per annum.

On the commencement of construction of the third unit, he said, "Ideally construction should start after the completion of the second unit, it does mean that we cannot start before that."

Recently the MSI's Managing Director and CEO Shinzo Nakanishi had stated that the Indian car market is likely to double to 5 million units by 2015 and the company needs to be prepared to meet the growing demand in order to maintain its leadership position.

According to SIAM, the market leader sold 2,82,488 cars during the April-July period this, representing a 47.68 per cent share in the overall 5,92,405 units market.

In the comparable year-ago period, MSI had a 53.13 per cent share in the 4,40,069 units car market, with sales of 2,33,811 units.

However the company was hopeful to regain an over 50 per cent share of the domestic passenger car market by the end of this fiscal.