Suzuki, Maruti to invest Rs 6,000 crore over 5 years
By Our Corporate Bureau | 24 Sep 2004
New Delhi: Suzuki Motors and Maruti will invest over Rs6,000 crore over the next five years to set up a new car assembly unit, a diesel engine manufacturing unit and for increasing automation and efficiencies in Maruti's current facilities.
At a press meet after the Maruti board meeting yesterday, the Maruti Udyog chairman, S. Nakanishi, announced that the company would hold a 70 per cent stake in the new joint venture, under which a car assembly unit is being set up; Suzuki would hold the balance. The new unit, which would make high-end cars, is being set up in Manesar, Gurgaon, and would have a capacity to produce 250,000 units a year. The proposed diesel engine unit would be set up under Suzuki Metals India, an existing 49:51 joint venture between Maruti and Suzuki, respectively.
Jagdish Khattar, managing director of Maruti Udyog said that the diesel plant would have an over 300,000 units per annum capacity. The plant will supply diesel engines to Maruti as well as export engines to Suzuki subsidiaries in Europe and Asia.
"The total investment in the unit could be about Rs1,000 crore, as the capacity at the unit is now higher than what was envisaged earlier. This is a substantial increase from the earlier capacity of 100,000 units planned at an investment of Rs350 crore," he said.
Suzuki would also soon undertake a feasibility study to set up a gearbox production unit in India, Nakanishi said. He added that the unit would be set up under Suzuki Metals India, which is likely to be renamed Suzuki Engineering India.
Nakanishi also said that Maruti would introduce a new model, Swift, in the country next year, which would be produced at Maruti's current plant. The car is positioned in the premium hatchback category and would compete with the Hyundai Getz.
On Suzuki's proposed two-wheeler facility in India, Nakanishi said the company would start making motorcycles and scooters by the end of 2005 through a joint venture, in which it has 51 per cent stake. The two-wheeler unit will have a capacity of 250,000 units a year.