Maruti Suzuki looking to invest around Rs 45,000 crore to double production capacity

Maruti Suzuki, the country’s largest carmaker, is looking at investing about Rs 45,000 crore to double production capacity to four million units per annum by the end of the decade.

Speaking at the company’s annual general meeting on Tuesday, Maruti Suzuki chairman RC Bhargava said the company will utilise its cash reserves to double production capacity by 2031.

ET was the first to report about the company’s investment plans, on May 11.

The company will also take up suggestions by shareholders for a stock split to its board for consideration, said Bhargava.
He told shareholders that the company has reached “two million production and sales in 40 years and is now preparing to add two million in the next eight years”. Over the next eight years, the company is targeting doubling its production capacity, sales and turnover of the company in the third phase of its journey.

Bhargava had earlier told shareholders in the company’s annual report that the company’s “first phase was when we were a public enterprise”. “The second phase ended with the Covid pandemic, and the Indian car market became the third largest in the world,” he had said. On Tuesday, he said with governments across the world pushing for carbon neutrality, multiple technologies are required to be deployed to transition to clean mobility. “The era before us is going to be a very uncertain era, a very challenging era”, he said, adding there is a need for structural reorganisation of the company in view of its future growth prospects.

To this end, Maruti Suzuki is looking at acquiring parent Suzuki Motor Corporation’s manufacturing facility in Gujarat, which rolls out 800,000-900,000 vehicles every year. It said acquisition of Suzuki Motor Gujarat and operating it under the aegis of a single management will enhance efficiency in production processes as it expands footprint.

“Putting up these 2 million cars itself will cost us something close to Rs 45,000 crore. It depends how inflation goes but at the moment we estimate the cost about Rs 45,000 crore for 2 million cars,” Bhargava said.

Aa regards the stock split suggested by shareholders, Bhargava said, “We will again take it up in the board. I accept that it will certainly increase the ability of people to trade in shares because the price of the share is around Rs 10,000.”

However, as far as performance of the company and return to the shareholders is concerned, a split in shares will not make a significant difference, he said.


Read original article here

Denial of responsibility! Yours Headline is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a Comment