Maruti plans third plant at Manesar to meet soaring demand

Maruti Suzuki India Ltd, the country's largest carmaker by sales, plans to invest around Rs1,925 crore for setting up a third plant at its facility in Manesar. This will be Maruti's sixth plant, and also mark its largest investment in a single plant in the country.

After the proposed expansion at Maruti Suzuki, which is majority owned by Japan's Suzuki Motor Corp, India will become the parent company's biggest production base, overtaking its facilities in Japan and China.

Osama Suzuki, director, Maruti Suzuki, and chief executive officer of Suzuki Motor Corp, told the media in New Delhi on Tuesday, "We had not estimated the pace at which demand for cars would grow in India. We are investing 35 billion yen for constructing a new plant at Manesar to meet the increase in demand."

With automobile sales reporting record growth in the first half of the year, Maruti Suzuki has been facing supply constraints in delivering some models.

The need for capacity, greater than anticipated earlier, has come about because of the unexpected surge in demand for the multi-seater Eeco and also for the Swift. Company executives said sales of the recently-launched Eeco were three times more than the initial target of 6,000 units a month.

''We have decided to concentrate in the 1-1.3-litre engine capacity cars where the bulk of sales originate,'' said Suzuki. He said the firm will also look at bigger cars.