Maruti mulls 7th plant; aims to sell 30 lakh units by 2015-16

According to sources close to the development, the firm has already started internal discussions to set up its 7th plant and a final decision to this effect is likely to be taken within the next one year.

At present MSI is setting up two new units inside its Manesar facility at a total investment of Rs 3,625 crore. 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.

Sources said the new plant could be either at the Manesar facility or elsewhere depending on the infrastructure situation once the two new units there are completed. When contacted, Maruti Suzuki India (MSI) Chairman R C Bhargava said: "By 2015-16, the passenger vehicle market is estimated to be about 5 million units. We would like to maintain our market share to the maximum possible extent and for that we will be selling between 2.5 million units and 3 million units."

He, however, declined to comment on whether the company will be adding new capacities to meet the demand by then.

"If we run out of capacities, then we will have to look for something else. But it all depends on how the existing and upcoming capacities will be utilised, which will go on till 2013," Bhargava said, adding any decision to set up a new unit will be taken in consultations with parent Suzuki Motor Corp.

Sources, however, said the company will consider Manesar complex, which is spread across about 600 acres of land, as the first option for the new facility.

"In any case, the expansion is likely in Manesar. But the company is also looking at the infrastructure aspect to avoid any kind of congestion in the area... In a year's time all will be cleared and a decision is expected by March-April, 2012," a source said.

If MSI decides that Manesar cannot handle too much of load after the two upcoming plants go on stream, then it will look for a new location for the new plant, the source added.

MSI's present overall capacity is 12 lakh units per year. Once the new units, currently being constructed at Manesar, becomes operational by 2012-13, the company's total production capacity will go up to 17 lakh units annually.

The two new plants will have a capacity of 2.5 lakh units annually. The company is aiming to open the second unit in Manesar by September-October this year, while the third one is scheduled to be operational in 2012-13.

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.

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. Last week, the company had said it will hire at least 2,300 people, mainly for its upcoming two new plants in Manesar, within next two years.

At present, MSI, which is 54.2 per cent owned by Suzuki Motor Corp (SMC), employs 8,617 people as on March 31, 2011.