Suzuki preparing ground for $1.3-bn plant in Gujarat

Reports that Maruti Suzuki is planning to set up a new plant in Gujarat were virtually confirmed today, as Suzuki Motor Corp (which owns a majority stake in Maruti Suzuki India) told Japan's Kyodo news agency that it is likely to locate a new $1.3 billion plant there.

The Sanand district of Gujarat is rapidly emerging as a new auto hub of India, especially after Tata Motors relocated their 'Nano' manufacturing plant there after being virtually thrown out of West Bengal.

Several other major car-makers are implementing new projects in Gujarat – increasingly famous for efficient administration; and with port facilities within easy reach. This move has become more imperative as labour unrest is becoming endemic in the Gurgaon region of Haryana, India's original 'automotive belt'.

Maruti has borne the brunt of the troubles at its Manesar plant in Haryana, where worker unrest has adversely affected the production of some of its best-selling models since at least June this year. (See: Worker unrest at Maruti's Manesar plant intensifies)

"We haven't come to a decision yet. We plan to announce the location of the plant by the end of October," Suzuki Motor spokesman Ei Mochizuki told Reuters. Significantly, he added that chairman and chief executive Osamu Suzuki visited Gujarat last week.

Suzuki has been in the news for the last few days after ending its alliance with Volkswagen.

The German carmaker, which owns the Audi, Bentley, Bugatti, Lamborghini, Skoda, SEAT brands, was hoping to push its car sales in developing markets through the partnership. Volkswagen currently sells its upmarket cars in India through dealerships.

Maruti Suzuki said last month it expected to post single-digit sales growth this fiscal year, a far cry from its 25-per cent growth last year. (See: MSIL looks to festive season to boost sales)