Maruti’s proposed Gujarat plant delayed due to market slowdown

Posted on: Aug 28, 2013 - 12:25pm IST

Maruti Suzuki has decided to wait out the current slowdown in the Indian market before setting up its new manufacturing facility in Gujarat.

The country’s leading car maker has signed an agreement with the Gujarat government to establish a factory near Mehsana at an investment of 4,000 Cr. The construction work on the 700 acre land is yet to begin.

Maruti Estilo
The market slowdown has delayed the Gujarat plant and also resulted in the axing of the Estilo.

Speaking at the annual general meeting, R.C.Bhargava, Charman, Maruti Suzuki, said –

It is unlikely we would commission the unit in Gujarat by the end of 2015-16. The slowdown in the automobile sector is very acute.

He also added that the decision to go ahead with the project would come only after a detailed market study in the next two to three years. However, the automaker is adding a new assembly line at its Manesar plant. Once the third line is up and running, Maruti’s total annual production capacity would stand at 1.5 million units.

Maruti’s absence in the flourishing compact crossover SUV segment is keeping the growth at bay. The company has showcased the XA Alpha mini SUV concept at Auto Expo 2012 but we have no updates on the production model.

The delayed Mehasana project also means a subsequent delay in the second plant in Gujarat which is another 700 acre facility near Vithlapur.

[Source: Business Standard]

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2 thoughts on “Maruti’s proposed Gujarat plant delayed due to market slowdown

  1. Poornima says:

    Usefull Information….

  2. I think this is right decision. We do not know when the market will slow down or improve, which makes it tough to justify new capacity addition. The Gujarat plant will take about two-and-a-half years to make and earlier we were planning to begin building the plant by September this year. That target will not be met surely and we have not yet taken a decision as to when we will start on the plant. Even the Detailed Project Report for Gujarat has not been finalized by the Board yet.


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About the Author
Nithyanandh K

As a toddler, those wheeled machinery fascinated me even before I knew what they’re called as! So here I'm, petrolhead by birth, Mechanical engineer by qualification and automotive reporter by profession!