Maruti suzuki likely to start a plant in Gujarat, MD to meet CM Modi

The country's largest car maker Maruti Suzuki India's Managing Director Shinzo Nakanishi will meet Gujarat Chief Minister Narendra Modi tomorrow to discuss and possibly finalise a deal to set up its 7th manufacturing plant in the state, a senior government official said on Monday.

"Yes, Maruti Suzuki MD is scheduled to meet the Chief Minister tomorrow," Gujarat Principal Secretary (Industries & Mines) Maheshwar Sahu said when asked if any such meeting is planned to discuss the agreement.

If a deal to set up the plant in Gujarat is finalised in the meeting, then it will be the first major investment by Maruti Suzuki India (MSI) outside Haryana, where it has been present since its inception in 1983.

Sahu, however, declined to share details such as whether the final agreement will be signed tomorrow, the location of the proposed facility and likely incentives to be offered.

Official sources close to the development said MSI has zeroed in on a location near Sanand out of three offerings -- Sanand, Halol and Dholera.

"Besides Nakanishi, the top level MSI delegation will also include its Chairman R C Bhargava and some other senior officials," a source said.

When contacted, a MSI spokesperson said: "We are not in a position to comment in this matter."

Earlier this month, senior MSI executives had met state officials here and held three rounds of talks so far.

MSI's manufacturing has so far been concentrated in Haryana with two production facilities in Gurgaon and Manesar, besides an upcoming research centre in Rohtak.

If finalised, the Gujarat unit will be the company's 7th production plant. While the existing plant in Manesar can produce 3.5 lakh units annually, its three units in Gurgaon have a combined annual capacity of 8.5 lakh units.

At present MSI, which is 54.2 per cent owned by Suzuki Motor Corp, is setting up two new units with an annual installed capacity of 2.5 lakh units each inside its Manesar facility at a total investment of Rs. 3,625 crore.

Once the new units in Manesar become operational by 2012-13, the company's total production capacity will go up to 17 lakh units annually from 12 lakh units per year at present.

Besides fresh investment at Manesar, MSI is investing Rs. 2,500 crore for its K-series engine plant and setting up a dedicated R&D facility at Rohtak.

In 2010-11, the company's sales soared 24.81 per cent to 12,71,005 units from 10,18,365 units in the previous fiscal.

Domestic sales increased by 30.08 per cent to 11,32,739 units from 8,70,790 units in the previous fiscal.

MSI's passenger car sales during last fiscal jumped by 26.24 per cent at 9,66,447 units from 7,65,533 units in FY'10. However, its market share in this segment fell to 48.74 per cent from 50.09 per cent in 2009-10.