New plant will enhance auto hub status: Modi

Welcoming Maruti Suzuki India Ltd’s (MSIL) the board approval for purchase of land in Mehsana district of Gujarat, Chief Minister Narendra Modi on Saturday said the new manufacturing plant will enhance its auto hub status.

“At a time when Gujarat is on its way to become an auto hub across Asia, the new project from Maruti will expedite growth for the state and nation alike in the automobile sector. The announcement also beckons a new beginning for Gujarat even as the state enters the new Gujarati year,” Modi stated after the company's board approved to purchase land in Mehsana district of Gujarat to set up manufacturing facilities.

Commenting on the development, Saurabh Patel, minister of state for industries said, “We welcome MSIL board’s decision and we are confident Maruti will do a wonderful business in the state of Gujarat.”

In an official announcement, MSIL said that the purchase would be subject to final negotiations on price and all legal formalities being completed. The company will buy 1,400 acres of land, of which 1,000 acres will be for MSIL, while the rest 400 acres will be for its vendors. Subject to final negotiations, the production could start from the new plant in Gujarat by 2015 with an initial capacity of one million units.

Top officials from MSIL and Suzuki Motor Corporation (SMC) led by RC Bhargava, chairman of Maruti Suzuki had earlier met Modi and state ministers twice before seeking a board approval for setting up a plant in Gujarat.

This is the third major announcement from an auto major for setting up a plant in Gujarat. This year, the likes of Ford India and PSA Peugeot Citroen announced setting up of integrated car manufacturing plant in Sanand, near Ahmedabad. In fact, by 2014, recently announced plants of Ford India and PSA Peugeot coupled with already operational plant of Tata Motors will result in Sanand carrying an installed capacity of 6,55,000 cars per annum. Of these, Peugeot, out of total planned capacity of 3,40,000 units in phased manner, is aiming for an initial installed capacity of 165,000 cars per annum by 2014.

On the other hand, Ford India will also commission its car manufacturing facility by 2014 with an installed capacity of 240,000 cars per annum. Add to that, with General Motors expanding existing capacity at its plant in Halol, Gujarat would be put onto the auto map of India with a total installed capacity of 7,65,000 cars per annum by 2014.