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Last Updated : Apr 29, 2019 04:22 PM IST | Source: Moneycontrol.com

Maruti Suzuki may completely move Brezza production to Toyota’s Bengaluru plant

If the company goes ahead, this will be the first of its kind move as Maruti has not outsourced the production outside the Suzuki fold till now.

Swaraj Baggonkar @swarajsb

Maruti Suzuki, India’s largest carmaker, may completely shift the production of its compact SUV Vitara Brezza to Toyota plants in Karnataka.

If the company goes ahead, this will be the first of its kind move as Maruti has not outsourced the production outside the Suzuki fold till now.

In March, the board of Maruti Suzuki cleared proposals to partly source Brezza sports utility vehicle from Toyota Kirloskar Motors (TKM) as a part of the broader non-equity based agreement signed between Suzuki and Toyota in February 2017.

But, it has now emerged that Maruti Suzuki could also explore the idea of completely moving Brezza production to Toyota’s Bengaluru-based factory.

Responding to a question on whether Brezza production will move completely to TKM, a top executive of Maruti Suzuki said, “Those details are being worked out and of course we will follow the option which is most attractive which gives us the maximum operational advantage.”

Maruti executives were talking to analysts after the announcement of fourth-quarter results.

“The board has passed a broad resolution and finer details are being worked out and we will decide the course of action depending on what works out maximum advantage”, added the executive.

Free up capacity

If Brezza production moves completely to Bengaluru, this will free up production lines at Maruti’s Haryana-based factories located at Manesar and Gurugram.

While this will be the first time Maruti is outsourcing outside the group, it also sources vehicles from its parent company Suzuki Motor Corporation at present, which runs the Gujarat plant.

Maruti Suzuki sourced 96,272 cars from Gujarat in the Jan-March quarter. The plant has seen a gradual ramp up in volumes since the inauguration of its first plant in September 2017, followed by the inauguration of the second plant in January 2019.

In the April-June quarter, Maruti sourced 67,000 units from the Gujarat plant. A third plant will become operational in 2020, as per the company. Presently, only the Swift and Baleno are made at the Gujarat plant.

Vitara Brezza SUV clocks an average of 13,000 units a month for Maruti and is the market leader in the 25,000-30,000 units per month segment. The Brezza is the one of the first vehicles to be conceived, designed and developed in India by Maruti, which also serves the export markets.

Under the memorandum of undertaking (MoU) signed between the two Japanese giants, Toyota will get access to Brezza and will be allowed to sell the SUV under a different brand name starting 2022. The agreement also allows Toyota to source the Baleno from Maruti, and a commercial launch of it is expected in the next few months.

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First Published on Apr 29, 2019 10:34 am
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