With the inauguration of its Manesar plant, auto major Maruti Udyog is aiming targeting a total output of 1 million units by 2010 and the company will continue to expand its capacity steadily over the next few years.  In 2006, Maruti sold 630,000 vehicles.

Though senior Suzuki officials say the company would invest around Rs9,000 crore over the next three years, it is not clear if the entire investment announced by Suzuki would be routed through Maruti as it is possible that part of it may be directly invested by Suzuki, which has a 54-per cent stake in Maruti.

The fourth car assembly plant yesterday that Suzuki and Maruti inaugurated yesterday in Manesar, Haryana, has a capacity of 1-lakh units per annum and can be scaled up to 3-lakh units at a later stage. Maruti currently has an installed capacity of 3.5-lakh units per annum spread over three integrated plants, but can produce more than 5-lakh units.

The new Manesar plant would mostly produce the fast-selling hatchback model Swift. The export model, which is currently under development by Suzuki, would be produced in the plant by 2008-09. Maruti would also produce 50,000 units per year for Nissan starting 2008-09 under a production agreement. Nissan is expected to market the model outsourced from Maruti mostly in Europe.

A diesel engine plant, which would produce the 1.3-litre common rail diesel unit, was also inaugurated yesterday at the same 600-acre site. The diesel plant is a 70:30 JV between Suzuki and Maruti and has a capacity of 1-lakh units per annum.

The capacity of the engine plant would also be hiked to 3-lakh units by 2010 as Suzuki expects good demand for diesel-powered cars in coming years. This plant may export engines to Suzuki's East European plants in future.

To introduce Fiat's CRDi engines
The 1.3-litre common rail diesel engine is being manufactured under license from Fiat. General Motors, which held a 20-per cent stake in Suzuki earlier, had formed a technical alliance with Fiat and the diesel engine project was a part of it.

As Suzuki was a GM partner, the company received the license to manufacture the engine. Ironically, Fiat India is yet to introduce this engine, which is regarded as the best diesel engine in the world in its class. The Fiat-Tata Motors combine is expected to introduce this engine in some of their models by early next year.

Maruti launched the diesel-powered Swift in December last year and the model has received very good response. The company would be able to satisfy the demand and cut short the waiting list for the model as production from the new plant would ease the supply situation. The company may also launch a sedan version of the Swift to replace its ageing entry-level sedan Esteem.

Maruti is also expected to replace the Baleno sedan with a completely new model before the end of this year. The car is reportedly undergoing testing in India and is likely to be positioned against the likes of Honda City and Chevrolet Optra. The fully redesigned SUV model Grand Vitara may also be launched this year as a fully imported unit.