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May 18, 2017 11:42 AM IST | Source: Moneycontrol.com

Maruti requests parent Suzuki to advance production deadline in Gujarat to 2018

Each of such production lines will have an installed capacity of 250,000 units a year translating to 750,000 units a year on all the three lines combined

Maruti requests parent Suzuki to advance production deadline in Gujarat to 2018

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Car market leader Maruti Suzuki has requested parent Suzuki Motor Corporation (SMC) to advance the commissioning date of the second production line which is under construction in Gujarat to 2018 from the earlier announced target of 2019.

The first production line of the Gujarat plant, having a capacity to produce 250,000 units a year, got commissioned in the last quarter of the last financial year. While work on the second such line is underway, Maruti believes that a third line will be necessary to cater to future rise in vehicle demand.

Speaking to CNBC TV18, RC Bhargava, Chairman, Maruti Suzuki said, "The first line has been commissioned and the second line work is underway. The present target for the second line commissioning is 2019 but we have been requesting Suzuki to see if that can be advanced by a few months so it can happen in 2018. Work on the third line will be necessary because the way the economy is growing and the market is growing there is need for more capacity.”

Each of such production lines will have an installed capacity of 250,000 units a year translating to 750,000 units a year on all the three lines combined. “But the production can be stretched to 800,000-850,000 a year, looking at our experience on doing the same at Manesar,” added Bhargava.

SMC will invest Yen 100 billion (Rs 6,000 crore) in the Gujarat plant toward capacity expansion, according to Nikkei. This will be in addition to the Rs 8,500 crore investment announced by Suzuki earlier. These investments are done by SMC in Suzuki Motors Gujarat which is a 100 percent Suzuki subsidiary.

Speaking about the spike in sales in the domestic market Bhargava said, “Retail trends have been excellent. In fact the inventories with the dealers are much lower than what is actually the optimum level we would like to keep with dealers. Normally, we would like to keep a month’s inventory with the dealers that would mean 130,000 cars and by end of December inventories had fallen to 30,000 cars. Even today the inventory is 80,000 so the problem is that we are not able to keep up with the retail sales as well as replenishing inventory”.

Last month Maruti Suzuki saw a jump of 23 percent in domestic volumes to close at 1.44 lakh units riding high on demand for models like Swift, Baleno, Brezza and Alto.
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