Maruti Suzuki has said it might set up a third factory in the country as it races to meet burgeoning demand. The company, majority-owned by Suzuki Motor, has forecast India’s car market could more than double to 5m units annually by 2015 and said it must increase supply to keep its leadership position.
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“We’re preparing a project report for the third unit,” Maruti Suzuki India chairman RC Bhargava told Reuters at an auto function in New Delhi, adding a final decision would be taken by the company’s board.
Maruti, which has a strong following among India’s growing middle class, is already producing at full capacity and has long waiting lists for some popular models. It is seeking to claw back business after its market share slipped below 50% amid fierce competition from domestic and foreign rivals.
Bhargava estimated the cost of the proposed factory, which would be built at Maruti’s complex at Manesar in the northern state of Haryana, at INR17bn (US$362m).
He gave no timeframe for construction of the factory, which would have a production capacity of 250,000 units.
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By GlobalDataMaruti, whose strong position in India has made it Suzuki’s largest and most profitable business outside Japan, is currently setting up a second factory at its Manesar plant with an annual capacity of 300,000 units. Its Gurgaon plant on the outskirts of New Delhi produces 700,000 units a year.
India has posted blistering car sales growth, with more than half a million cars sold in the first four months of the current fiscal year.
Car sales in India hit a record high last month on the back of soaring demand in rural areas, jumping 38% to 158,764, compared with 115,084 in the same month last year, according to industry figures.
