Maruti to expand Manesar factory capacity by 40% in two years

Maruti Suzuki India Ltd. | Automobiles - Passenger Cars | Automobiles | BSE: 532500 | NSE: MARUTI

08 Sep 2009 Evaluate

Maruti Suzuki plans to expand its passenger vehicle production capacity at Manesar by around 200,000 units over the next two years. Currently, the plant at Manesar which produces the company’s new models like the Swift, A-Star and the Ritz, has a capacity of around 3,00,000 units.

Last month, the new facility touched 500,000 units on a double-shift. A company official said the cost of setting up a 100,000 vehicle capacity increase would be around Rs 1,500 crore. The expansion decision is likely to be taken next month.

The idea of expanding the Manesar facility comes after the company’s decision to stop production of cars at Plant-1, at its Gurgaon factory. Plant-1 has an annual capacity of around 160,000 vehicle units. There are three plants located inside its giant Gurgaon facility that produce older Maruti models like the Maruti 800, Wagon R, Omni, and the Versa, and one engine manufacturing facility that churns out the K-series engine. Total vehicle production capacity at Gurgaon is 700,000 units yearly.

Since this is the oldest manufacturing facility and all production equipments are almost fully depreciated, it would be stopping the production of cars at Plant-1 in Gurgaon in a gradual manner. The space will be used for engine assembling, machining and other works. Maruti Suzuki currently has a yearly production capacity of a million cars. This is to now gradually reach 1.2 million cars.

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