Maruti to shift 3 lakh units production to Manesar from Gurgaon

The Gurgaon facility that has three units, currently produces nearly 9.5 lakh units per annum. Once the vehicle output is trimmed at the facility to 6-6.5 lakh units, the company aims to utilise the idle space and workforce to produce more engines and other parts there.

"The Gurgaon facility is very congested and old. We need to reduce some production there. The plan is to reduce the output to 6-6.5 lakh units annually," Maruti Suzuki India (MSI) Chairman R C Bhargava told PTI.

The company had rolled out nearly 9.5 lakh units from Gurgaon in 2010-11 out of a total installed capacity of 8.5 lakh units at three plants in the complex, spread over 300 acres of land. It produces models like Swift, M800, Omni, WagonR, Ritz, Alto, Eeco and Gypsy there.

"We will shift the excess production to Manesar from Gurgaon... From the two new upcoming plants in Manesar that will have a total installed capacity of 5 lakh units, we should be able to do 7 lakh units," Bhargava said.

At present MSI is setting up two new units inside its Manesar facility at a total investment of Rs 3,625 crore. The existing plant there produced about 3.5 lakh units in 2010-11.

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

On by when the company will start trimming its production in Gurgaon, Bhargava said: "We would like to do it as soon as we can do. It will depend on creation of new capacity and market demand."

Besides vehicles, the Gurgaon facility also produces engines, manufacturing about 7 lakh units per year of the K-Series engines and about 4.5 lakh units per year of F, G and M-Series engines.

Elaborating on how the company plans to utilise the idle space post-decongestioning Gurgaon, Bhargava said: "It will be mainly used for parts production. We will produce more engines and will ramp up the capacity."

When asked by how much the engine capacity will be increased, he said: "We have not decided it yet, but it will obviously be matched with the level of car production."

Besides Gurgaon, a separate entity -- Suzuki Powertrain India Ltd -- produces diesel engines at the Manesar facility. It has a capacity to roll out 3 lakh units per annum.

MSI is also considering to set up its 7th plant, over and above the two upcoming units in Manesar, as it aims to sell up to 30 lakh units every year by 2015-16.

The company's present overall vehicle capacity is 12 lakh units per year. Once the two new units at Manesar become operational by 2012-13, its total production capacity will go up to 17 lakh units annually.

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 the fresh investments 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.

Earlier, the company had announced to 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 employs 8,617 people as on March 31, 2011.