Report – Maruti Suzuki has no Plan B for Gujarat plant; confident of shareholders’ approval

Posted on: Sep 2, 2014 - 9:20am IST

After deciding to put to vote its decision to transfer its upcoming manufacturing facility in Gujarat, Maruti Suzuki now says that it doesn’t have a plan B. The company will need 3/4th of its minority shareholders, holding 44 percent stake, to approve in order to go ahead with the transfer of the plant.

Suzuki Ciaz Concept front at 2014 Moscow Motor Show
Maruti Suzuki says it has no Plan B for the Gujarat Plant. It needs 3/4th majority from its 44 percent shareholders to keep the status quo.

Back in March, it was announced that Suzuki Motor Company had also agreed to relook some of the clauses in the agreement, especially the one about Maruti Suzuki purchasing at a premium the cars that will eventually be manufactured in the plant. Reports now suggest that this and other such clauses have been explained to the company’s shareholders and they are said to “understand the company’s position.”

Maruti Suzuki’s chairman R C Bhargava says that since the company contributed 40 percent of the parent company’s sales and 25 percent of profits in 2013, Suzuki Motor Company’s decision is to set up the plant in Gujarat. He also says that as far as the plant’s operations are concerned, everything from the vendors to everyday production to controlling the sales will be in Maruti Suzuki’s hands.

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The plant is expected to go on stream in 2017 and will, by adding a capacity of 1.5 million units, take the company’s production capacity in India to 3 million.

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[Source – Economic Times]

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Karthik
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A bit of a car freak and a bike nut, and a fan of trucks and technology too. Expect sharp stories that focus on those four fronts. As always, stay tuned to IndianAutosBlog.com for quick and unassuming updates from across the world.