India’s largest carmaker Maruti Suzuki India said on Thursday that it had received approval of its minority shareholders to source cars from a Gujarat plant to be built by parent Japanese Suzuki Motor
India’s largest carmaker Maruti Suzuki India said on Thursday that it had received approval of its minority shareholders to source cars from a Gujarat plant to be built by parent Japanese Suzuki Motor Corp.
Initially, the Gujarat plant was proposed to be owned by Maruti Suzuki but the plan was changed later with its Japanese parent Suzuki Motor Corporation announcing in January last year that it would invest $488 million to build the plant. Last year, Maruti Suzuki had decided to seek minority shareholders' approval after tweaking some of the earlier proposals.
Maruti had sought nod from minority shareholders to approve a contract manufacturing agreement for production and sale of vehicles between it and Suzuki and lease deed for leasing land for purposes of implementing the contract manufacturing agreement. “Out of the total votes cast by the minority shareholders, 89.75 per cent voted in favour while 10.25 per cent voted against the resolution,” said Maruti Suzuki India (MSI) chairman R.C. Bhargava.
Mr Bhargava said the company will move ahead to transfer assets at the Gujarat plant, where it has already invested Rs 350 crore, to Suzuki’s wholly-owned arm Suzuki Motor Gujarat Pvt Ltd.
“The total investment there will be Rs 18,500 crore for an overall capacity of 15 lakh units. There will be six lines, each with a capacity of producing 2.5 lakh units to be set up one after another,” he said.
The first line will be operational in the early part of 2017, Mr Bhargava said, adding the setting up of the rest of the lines would depend on market conditions. “We need capacity. We are running out of capacity at Haryana as we will be utilising 100 per cent this year. We have to go for improvisation for the next year (to get more capacity),” he added.
