Maruti Hopes to Get Clearance for Gujarat Plant

By ENS Economic Bureau

Published: 01st September 2014 06:00 AM

Last Updated: 31st August 2014 11:11 PM

Email0

BANGALORE: Passenger car maker Maruti Suzuki Limited (MSL) has stated that they are confident of getting shareholder approval for their Gujarat Plant.

R C Bhargava

R C Bhargava, Chairman of Maruti Suzuki India said that the company does not have a ‘plan B’ on the issue. “We are thinking of getting voting (done) in October. There is no plan B, I can’t see why it should not happen,” Bhargava was quoted as saying by agencies.

The parent company, Suzuki Motor Corp (SMC) had decided that one of its subsidiaries would set up the third plant of the company in India reducing Maruti India to become a trading channel.

Dispelling the controversy, Bhargava reportedly said, “essentially, what has driven the decision to let Suzuki to finance the Gujarat plant is really that Suzuki now understands that their future as a global car maker is going to be increasingly dependent on India.”

He added that Maruti contributes around 40 per cent of the total sales volume of Suzuki and 25 per cent of the profit last year, it was reported. “In all respects, the Gujarat plant will function as a Maruti plant; we control when the production lines are established, when we need more capacity, we will determine what needs to be produced and how much is to be produced,” agencies quoted Bhargava.

The plant is expected to be commissioned by mid-2017 and will double their capacity from 1.5 million currently to 3 million.

“Our estimate is that the first unit to commission will cost about Rs 3,000 crore and at today’s cost we think the subsequent units each would be about Rs 2,500 crore,” Bhargava said on the likely investments for the plant.