Suzuki and Maruti move to dominate Indian roads

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.