Sun, Aug 26, 2012 - Page 13 News List

Maruti may double capacity at new India plant: report


Japanese-owned Maruti Suzuki may double capacity at its planned car plant in India’s Gujarat state, as it reviews strategy following deadly labor unrest at another major factory, a report says.

The Gujarat plant — due to open in 2015 or 2016 — will be the first for India’s biggest carmaker outside the northern state of Haryana, where a riot by workers last month at its Manesar factory led to the death of a manager and injury to 96 supervisors.

Dow Jones Newswires, quoting an unnamed senior Gujarat state official, said initial capacity of the new plant could be as high as half a million cars per year — twice what Maruti originally envisioned.

Maruti is investing 40 billion rupees (US$727 million) to build the factory.

The report on Friday came as Suzuki Motor chairman Osamu Suzuki traveled to the western Gujarat state to meet chief minister Narendra Modi.

Suzuki is on a week-long visit to India to take stock of the situation at Maruti, which is crucial to the Japanese firm’s fortunes because it contributes one-third of its pre-tax profit and accounts for half of its production outside Japan.

A Maruti spokesman would not comment when asked about plans to enlarge the initial planned capacity of the Gujarat plant at Mehsana, 100km from the state’s main city of Ahmedabad.

Last month’s violence at the Manesar plant, near New Delhi, was the worst since Maruti cars started rolling off assembly lines in India in 1983. Maruti’s other factory is located in nearby Gurgaon.

The Indian unit, the country’s largest carmaker by sales, lost US$9 million a day during a subsequent 21-day plant shutdown, which ended earlier in the week, analysts estimate.

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