Encouraged by record sales in FY24, the country's top four passenger vehicle (PV) makers have committed investments exceeding Rs 1 lakh crore for the current fiscal year, according to data compiled by Moneycontrol. This confidence, according to industry experts, is rooted in the nearly 4.23 million units of PV sales during the year ended March 31, with sustained growth projected for the coming years.
While a significant portion of investments from carmakers like Maruti Suzuki, Hyundai Motor India, Tata Motors, Mahindra and Mahindra (M&M), and JSW-MG Motor India will be allocated to expanding capacities for Internal Combustion Engine Vehicles (ICEVs) to meet demand, a considerable sum will also be directed towards platform, product, and technology development for Electric Vehicles (EVs).
Big ticket plans
Among the top car makers, Maruti Suzuki, aiming to reclaim its 50 percent market share by the middle of the decade, plans to invest Rs 10,000 crore in various initiatives, including new model development, capacity creation and expansion, etc., for the current financial year. The current year's capex is a part of the Rs 1.25 lakh crore-outlay that the carmaker has earmarked till 2030-31, a senior company official told Moneycontrol.
Hyundai Motor India Limited (HMIL), which achieved all-time high sales in CY 2023 and FY 2023-24, intends to spend Rs 13,180 crore in the medium term, primarily focusing on expanding its manufacturing capacity. Of this amount, nearly Rs 6,180 crore will be invested in constructing a greenfield facility in Chennai, Tamil Nadu, and Rs 6,000-7,000 crore for overhauling production lines at its Talegaon facility, Maharashtra.
Unsoo Kim, MD and CEO of Hyundai Motor India, emphasized that these recent investments are in addition to the previously announced Rs 20,000 crore investment towards capacity expansion, new products, and a battery pack assembly plant, outlining HMIL’s vision for the next decade in India. Notably, the South Korean carmaker is also considering listing its India unit and experts feel that a bulk of the fund raise is expected to go towards expanding capacities and product development.
Homebred auto major Mahindra and Mahindra (M&M) has declared plans to invest nearly Rs 27,000 crore during FY 2025-27 in product development, capacity expansion, and technological advancements in the automotive division.
“We are not neglecting ICEVs, as they remain an important part of our portfolio for consumers over the next five to seven years. Therefore, Rs 14,000 crore will be allocated to ICEVs, covering new models and refreshes, ensuring that we maintain the best SUV portfolio” Anish Shah, MD & CEO of M&M Ltd said recently at a post Q4 earnings call.
Another indigenous automaker, Tata Motors, announced an investment of Rs 43,000 crore for products and technologies in 2024-25. Jaguar Land Rover (JLR), Tata Motors’ British arm, is expected to account for the bulk of this, around Rs 35,000 crore.
P.B. Balaji, Group CFO of Tata Motors, at a post Q4 earnings call highlighted, “In FY25, JLR investments will see a 6 percent increase, while Tata Motors investments will remain stable,” noting that the investments are primarily directed towards product and technological advancements for both JLR and Tata Motors.
JSW MG Motor (formerly MG Motor India) recently revealed plans to invest Rs 5,000 crore to enhance production capacity and launch a new car every 3-6 months starting from September. The joint venture between China's SAIC and Indian conglomerate JSW Group aims to replicate a "Maruti moment" in the new energy vehicle segment.
A year after announcing Rs 5,300 crore investment plans in India, Nissan Motor Corporation and Renault SA have unveiled their future portfolio expansion, with four new sport utility vehicles (SUVs) expected to hit the market starting from 2025.
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