Maruti Suzuki may expand Manesar plant capacity by one lakh units by April 2024

Maruti Suzuki India (MSI) may increase its Manesar plant production capacity by one lakh units to cater to the enhanced demand before its Sonipat facility commences operations in 2025, a senior company official said.

The country's largest carmaker may also look at expanding production capacity at its Gurugram-based manufacturing facility to cater to the rising demand for its products.

Currently, MSI has a cumulative production capacity of 15 lakh units per annum at both Manesar and Gurugram plants. It additionally has access to 7.5 lakh units from parent Suzuki Motor's facility in Gujarat.

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The company has already commenced work at the new facility in Kharkhoda in Haryana. The plant is expected to be operational by 2025 with an installed production capacity of 2.5 lakh units in the first phase.

"As of now, we have about 22.5 lakh capacity in Haryana plus Gujarat...And in times to come, we are in process of working on the Kharkhoda plant, which will be up and running in the year 2025.

"And if required, I think most likely we might have to add about one lakh capacity on a short-term basis in Manesar to meet intermediate demand," MSI Executive Director (Corporate Planning and Government Affairs) Rahul Bharti said in an analyst call.

The additional one lakh unit per annum capacity at Manesar may come by April 2024 and Kharkhoda in the subsequent year, he added.

MSI currently rolls out models like Ertiga, XL6, and Eeco from the Gurugram plant and models like Alto, S-Presso, Celerio, Brezza and Dzire from the Manesar facility.

When asked if MSI is looking to increase capacity at Manesar plant to reduce manufacturing footprint at the Gurugram facility, the company's oldest plant, Bharti said: "We are not looking at any kind of reduction in Gurugram, in fact, at least in the shorter term, we might have to increase production in Gurugram."

On the upcoming plant at Kharkhoda in Sonipat, he said, "Our first plant (first phase) should be commissioned by the first quarter of calendar 2025. And I think we already have to start thinking about a second plant if demand growth continues in India."

The company plans to invest Rs 11,000 crore in the first phase of the Sonipat facility. MSI plans to invest over Rs 7,000 crore this year on various initiatives, including the construction work of the new plant in Haryana and new model launches.

Having achieved success with both Brezza and Grand Vitara, the company's pending customer order list has soared to about 4.12 lakh units at the end of September.

Increase in production would help the company reduce the order backlog. With a strong position in hatchback, sedan and multi-purpose vehicle segments, the automaker is now looking to consolidate its position in the fast-selling SUV segment.