Maruti Suzuki India Limited (MSIL), India’s top carmaker, is planning substantial investment of more than Rs 50,000 crore by 2030-31, including a major portion of this investment, amounting to Rs 45,000 crore, allocated towards doubling the production capacity to 4 million vehicles per annum, a newspaper report has said.
Additionally, investments will be directed towards enhancing the supply chain, expanding export infrastructure (with a goal to export 750,000 vehicles by FY31, a significant increase from the existing 250,000), strengthening marketing and sales teams, and supporting vendors in the ecosystem, R C Bhargava, chairman of the country’s largest carmaker told the Business Standard.
Moneycontrol could not verify the report independently.
The first unit of the upcoming one million-unit facility located in Haryana’s Kharkhoda is slated to start production in early 2025, and will have an annual capacity of 250,000 vehicles, with a plan to expand a similar capacity each year until the plant reaches its full capacity of 1 million vehicles. In addition, talks are underway to finalise the location for a second plant with an annual capacity of 1 million vehicles, expected to be operational by FY27, the report said.
“It takes an investment of Rs 22,000 crore-Rs 23,000 crore to set up a 1 million per annum plant. So you are talking about over Rs 45,000 crore (investment) just for the plants,” the financial daily quoted Bhargava as saying.
He went on add that a substantial investment will be essential for scaling up sales and marketing efforts, as well as enhancing the infrastructure to accommodate a significant surge in exports, among other initiatives. Plus, the company is in the process of finalising this comprehensive investment plan, which is expected to exceed Rs 50,000 crore, considering the major expansion requirements.
The expansion plan outlined by the MSIL chairman is based on the assumption of an average annual growth in vehicle sales ranging from 6 to 6.5 percent until FY31. Also, the plan entails an increase in the number of models offered by Maruti Suzuki from 17 to 27 by FY31, with six of these models being electric vehicles (EVs), according to the report.
The capital expenditure plan includes the expected investments directed towards the production of EVs, aligning with the automaker’s strategy to bolster its presence and offerings in the rapidly evolving EV segment.
Bhargava expressed the possibility of even higher growth, potentially reaching 7 to 8 percent in the coming years, particularly if the small car market, which has been relatively stagnant or in decline, begins to regain momentum.