Suzuki announces Rs 38,200 crore investment at Vibrant Gujarat Summit

Suzuki Motor Corporation will invest Rs 38,200 crore in Gujarat and will add 1.25 million units in capacity.

Published On Jan 10, 2024 11:05:00 AM

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Suzuki announces Rs 38,200 crore investment at Vibrant Gujarat Summit

At the ongoing Vibrant Gujarat summit, Toshihiro Suzuki, global CEO of Suzuki Motor Corporation, has announced an investment of Rs 38,200 crore in the state of Gujarat to add an additional annual production capacity of 1.25 million units. Suzuki will be investing Rs 3,200 crore in setting up a 2.5 lakh-unit electric vehicle production capacity at the Suzuki Motor Gujarat plant and also investing a Rs 35,000 crore amount to increase Maruti Suzuki's capacity by 1 million units annually by setting up a new plant.

Suzuki Motor Gujarat to get fourth production line for EVs
Rs 35,000 crore investment for setting up new plant in Gujarat

Suzuki invests to ramp up production

Addressing the gathering at 10th Global Summit of Vibrant Gujarat, Suzuki said, thanks to India's growth, “we will invest in the future. Firstly, the first battery electric vehicle from Suzuki Group will be rolled out from Suzuki Motor Gujarat by the end of the year. We plan to sell this model not only in India, but also export to Japan and European countries."

"Secondly, the company will expand its BEV production in the future. Suzuki Group will invest Rs 3,200 crore in Suzuki Motor Gujarat to add a new fourth production line, which can produce 2.5 lakh units per year. This will increase the annual production capacity of Suzuki Motor Gujarat from the current 7.5 lakh units to 1 million units."

Suzuki said that under the leadership of Prime Minister Modi, the Indian automobile market has been expanding steadily, and as a result, India has become the third largest market in the world. "We have also scaled up production capacity substantially in India, when compared to ten years ago. We expect 1.7 times in vehicle production, 2.6 times in exports in the current fiscal year," stated Suzuki.

“We will invest Rs 35,000 crore for the construction of the second car plant in Gujarat, which would produce another 1 million units per year. As a result annual production capacity in Gujarat will be 2 million units, namely, 1 million units at SMG and 1 million units at the second new plant," stated Suzuki sharing the Japanese carmaker's long-term commitment to the state and the country.

Gujarat emerging as auto manufacturing hub

Gujarat is seems to be emerging as one of the preferred locations for automakers to set up their manufacturing facilities over the last decade, posting stiff competition to Tamil Nadu, Maharashtra and the National Capital Region, which are major automotive clusters. The state’s close proximity to the western coast facilitates and the easy export and import of vehicles and parts are helpful in this regard. Apart from Maruti Suzuki, automakers, including Tata Motors, MG Motor India, Mahindra and Hero MotoCorp have manufacturing plants in the state.

The setting up of a new EV facility by Maruti Suzuki, along with Tata Motors' Sanand factory, which will be primarily for electric vehicles, will help the state emerge as a key electric car hub in the country. Tata’s cell manufacturing arm, Agratas, too has committed over USD 1.3 billion (about Rs 10,810 crore) in the state.

Maruti Suzuki's eco-firendly push

Beyond going electric, Suzuki is looking at different alternatives to reduce greenhouse gas emissions. “As far as reduction of greenhouse gas emission is concerned, our efforts will be through a multi-pathway approach. That means in addition to vehicle electrification, we will offer multiple options such as CNG, biogas, bio ethanol and green hydrogen. Taking advantage of animal wealth, we will start production of biogas from cow dung. Together with the National Dairy Development Board and Banas Dairy, Suzuki has already started construction of the fourth biogas plant in Gujarat,” stated Suzuki.

Maruti Suzuki expanding total production capacity

Maruti Suzuki currently has two manufacturing facilities – one in Manesar and another in Gurugram – apart from the Suzuki Motor Gujarat factory, which the company is acquiring from its parent company. Maruti Suzuki has plans to ramp up its output to 4 million units by 2030-2031. Currently, it produces around 1.3 million vehicles per annum across its plants in Manesar and Gurugram. Suzuki Motor Gujarat can produce around 7,50,000 vehicles.

“Right now, we have almost 2.2 million units capacity together with Suzuki Motor Gujarat. And this production capacity should go beyond 4 million units. For that, almost 2 million additional capacity is required. So that much investment we have to do," MD and CEO Hisashi Takeuchi had said earlier.

Apart from the newly announced Gujarat plant, capacity expansion is being carried out at Kharkhoda, Haryana. Maruti is investing Rs 18,000 crore for the Kharkhoda plant where the company plans an annual production capacity of up to 1 million vehicles. The first phase of the Kharkhoda plant, with a capacity of 2,50,000 vehicles per year, is expected to be commissioned by 2025.

Maruti Suzuki currently has 18 models in its portfolio. The carmaker will launch its first battery electric vehicle in India in 2024-25 and plans to bring five more electric vehicles by the end of the decade. Parent company Suzuki Motor Corp has already announced plans to invest JPY 4.5 trillion (Rs 2.82 trillion) globally on its electrification drive by 2029-30.

(with inputs from SHANKAR ABIDI and AMIT VIJAY M)

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