Maruti to move factory out of Gurgaon; shift inevitable, says R C Bhargava

The relocation of Maruti Suzuki’s plant in Gurgaon to a less inhabited area is inevitable, company chairman R C Bhargava said. The thirty-five-year-old plant was the company’s first manufacturing facility and has a capacity to make about 700,000 cars every year.

Bhargava said the relocation has to be done in a phased manner. “In the process of shifting you cannot stop the production from this plant for six-twelve months”. The plant accounts for over one-third of the company’s total production capacity. He said project managers will look at best ways to undertake the relocation of the facility. 

Besides Gurgaon, the country’s largest car maker has another manufacturing unit in Haryana, at Manesar with a capacity of 800,000 units. Its parent, Suzuki Motor Corp, has made AN investment in a Gujarat unit that sells cars to Maruti Suzuki for retail through the company showrooms.

More than 4,000 trucks enter and leave the company’s two plants in Haryana every day. The two plants receive raw materials and components from the 2,500 vendors in more than 3,400 trucks daily and send out 650 trailers loaded with cars every day. That obviously means a lot of congestion and traffic hassles for the residents.  

Bhargava said the company has to move from this plant, located in the middle of the city, to another location at some stage. “What was once an isolated location has now become part of the city. The local authorities and residents want a resolution to the congestion issue. You cannot run such a big factory in THE middle of a city. Hundreds of trucks and trailers move in and out of the plant every day carrying cars, steel and other raw materials,” he said, recalling about the shifting of DCM factory from Delhi years ago.

Last week, it was reported that the carmaker has sought 1,292 acres of land at Industrial Model Township (IMT) Sohna, about 25km from Gurgaon. Bhargava, however, said the size of land required for this exercise is not yet final. But it is going to a large parcel. “You need space for the component vendors. From our Gujarat experience we also learnt that there should be facilities like residential areas for employees and hospitals and schools”, he said,

The Gurgaon plant has made a significant contribution to the company’s performance and growth over the last thirty-five years. It rolled out some of the country’s iconic cars including Maruti 800 and Zen.

The relocation will also offer the company an opportunity to expand the capacity beyond 700,000 units. Suzuki is drawing aggressive plans to sell five million vehicles in India by 2030 through Maruti in an attempt to remain the market leader with a fifty per cent share. This will be almost a three-fold jump from its current sales volume. The company will need to add capacities to meet its sales target and retain market share. Suzuki has procured another land parcel in Gujarat, where it is expected to set up a greenfield manufacturing unit.