Suzuki Motor plans a new factory in India as a joint venture with Maruti Udyog. Maruti will have a 70% stake in the new joint venture.
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Suzuki had earlier announced plans to launch a new independent subsidiary in India. This led to a confrontation with the Indian government, which still holds a substantial stake in Maruti Udyog (MUL). The government was wary of Suzuki starting an entirely new wholly owned subsidiary as it would erode shareholders’ equity in MUL so the new proposal has taken the government’s view into account.
The new subsidiary, Maruti Suzuki Automobiles India Ltd, will be managed and operated independently of MUL, though MUL will providing “comprehensive business advice” and support.
The new plant in Manesar (Haryana) will have capacity of 100,000 units, with provision to increase to 250,000 later, and will concentrate on making ‘distinctive’ models to compete in the larger segments of the growing Indian car market.
The plant will employ 900 initially and the first cars are due off-line by the end of 2006.
Export vehicles will also be made.
Deepesh Rathore / Tilak Swarup
