Maruti Suzuki puts expansion program on hold

Passenger vehicle leader, Maruti Suzuki has deferred the commissioning of its Gujarat plant, in view of the slowdown in the Indian auto industry. Land for the plant is said to have been acquired near Mehsana. The reason for deferring the expansion program, which includes the building of new plant at Gujarat, was stated by company sources as lack of growth for the next two to three years. With little growth expected in the auto sector, what with the Indian Rupee sliding down to near Rs 69 to a US Dollar comparison, Maruti Suzuki has put on hold the plan to begin construction of the plant. The company will conduct a detailed study of the demand of automobiles in the country over the next two-three years. The land acquired at Gujarat for the plant measures 700 acres. The plant was earlier scheduled to go on stream by FY2015-16, with an initial installed capacity of 2.5 million units per annum at an investment of Rs 4,000 crore. Another 700 acres of land was acquired at Vithlapur earlier this year by Maruti Suzuki for the setting up of a second plant in the state. The addition of both plants would effectively double the company’s annual capacity to three million units. Maruti’s third assembly line at its existing Manesar plant is however on schedule, and expected to start operating from October 2013. It will boost the installed capacity of the facility to between 8.5 and 9 lakh units a year. The total capacity of the company’s plants at Gurgaon and Manesar will grow to about 1.5 million units a year. Greater than the projected 1.17 million units the company aims to sell this year.