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Maruti Suzuki to invest Rs 450 billion, doubling production

2023-09-01

Maruti Suzuki India (MSIL), the nation's leading automaker, has unveiled a bold plan to invest approximately Rs 450 billion to double its annual production capacity over the next eight years. The aim is to achieve an annual production capacity of 4 million units to meet changing market demands.

During the company's 42nd annual general meeting, MSIL Chairman R C Bhargava acknowledged the uncertain and challenging road ahead, citing potential inflation impacts. This investment will add two million cars to the company's annual production capacity.

To execute its 'Maruti 3.0' strategy, the company plans to diversify its powertrain offerings, focusing on electric vehicles, hybrids, compressed natural gas (CNG), and ethanol, aligning with evolving regulatory requirements.

In a significant move, Maruti Suzuki will acquire the entire 100 per cent stake in Suzuki Motor Gujarat, which owns the Gujarat plant, from parent company Suzuki Motor Corporation (SMC), increasing MSIL's share base by approximately 4 per cent.

Under 'Maruti 3.0,' the company aims to double its turnover and introduce 28 different models, including six electric vehicles, by FY31.

Despite a recent decline in Maruti's market share in the Indian passenger vehicle market, Bhargava reassured shareholders that the company's decisions have consistently been in their best interest. Transparent systems, efficient management, and cash reserves have positioned MSIL as a profitable entity with strong financial standing.

The substantial cash reserves, which have grown to around Rs 460 billion, will play a pivotal role in executing the Maruti 3.0 plan, ensuring infrastructure development and support services amid industry challenges.

Bhargava highlighted that the company's robust cash reserves have been instrumental in overcoming crises and reiterated the importance of maintaining such reserves for technology development, engineering advancements, and industry modernisation.