By Ketan Thakkar, Ashutosh R Shyam
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Maruti’s move to invest in new capacity in the next phase of expansion could be considered positive by shareholders as it will help in more productive use of free cash flow Maruti is generating.
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Maruti’s move to invest in new capacity in the next phase of expansion could be considered positive by shareholders as it will help in more productive use of free cash flow Maruti is generating.
MUMBAI: Maruti SuzukiNSE -0.33 % wants to shift its Gurgaon factory to another location in Haryana as it finds the city just outside the National Capital to be too congested for a manufacturing facility.
A top Maruti executive confirmed the plan, but said it would take 4-5 years to have a new facility to become operational. The local unit of Japan’s Suzuki Motor said it has no comments to offer.
Maruti’s Gurgaon facility has a major role in India’s automotive history. Since it rolled out the Maruti 800 in 1983, the company has grown to become the top automaker in India, now manufacturing one in every two passenger vehicles sold. Its success has encouraged several other automakers to invest in India’s frugal manufacturing capabilities, making the country one of the top production bases and markets for passenger vehicles and components.
Maruti’s intention is to acquire a fresh plot not too far for the company's vendor belt and employee, people in the know said.
It has reportedly requested the Haryana government to directly allocate 1,200-1,400 acres in Sohna, about 25 km south of Gurgaon, at a fair price. The state, which has a policy of auctioning land and not allotting directly, has yet to take a call on the demand.
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