Maruti plans major capacity expansions with three new plants

Maruti Suzuki will be commissioning an unprecedented 'one new plant every financial year and two new plants that will be under construction each year' in the next four to five years to participate in the fast-growing Indian market.

With a plan of investing over Rs 1.25 lakh crore over the next seven years, the country’s largest carmaker intends to not only drive the Indian passenger vehicle market to a new high, but will also leverage the base to export over 7.5 lakh cars by 2030-31.

1. Maruti plans to double production capacity to four million units by 2031
2. To use India as a base to export Toyotas to key emerging markets
3. Plans to sell two million cars, SUVs in India for the first time ever

Addressing the vendors in Turkey earlier this week, the top management urged the auto component companies that participated in the meet, to invest and keep pace with the new capacities coming on stream at Maruti Suzuki.

Rahul Bharti, Executive Director, Corporate Affairs at Maruti Suzuki confirmed that the company will be working on two greenfield manufacturing sites simultaneously. The first is in Kharkhoda, Haryana and the second, possibly in Gujarat. While Suzuki Motor Gujarat (SMG), the parent firm, already has three plants, it will add a fourth plant within FY25-26.

“So yes, practically every year we will have a new plant getting commissioned. Considering that a new plant commissioning lead time is 1.5 to 2 years, it means at any point in time about two new plants would be under construction,” he added. 

Maruti Suzuki plans to almost double the capacity to four million units in the next seven years, this will compel auto component makers to invest in capacity at their own end.

The parent, Suzuki Motor, is leveraging its global partnership with Toyota Motor Corporation to use India as a base for exports to supply Toyota vehicles to some key emerging markets. Apart from sharing vehicles for the Indian market — which allows Toyota to expand its addressable market in the country ­­— the partnership helps Maruti Suzuki build scale, thereby protecting its bottom line, if not boosting it. 

For the plants alone, Maruti Suzuki will be investing about Rs 45,000 crore for the incremental two million units. These new endeavours will lead to a similar investment of Rs 45,000 crore from the vendor's end as well to cater to the growing needs of Maruti Suzuki.

While the overall passenger vehicle market is estimated to grow at a lower single digit in FY25, Maruti Suzuki has guided its vendors to a production plan of 2.396 million units in the current financial year which is a growth of over 10 percent.

Of that, about three lakh units will be shipped to the overseas markets. So Maruti Suzuki is aiming to sell over two million vehicles in India for the first time ever. Sources say the company is eyeing an output of three million vehicles by FY27, before hitting the four million vehicles mark by FY31.

Bharti did not give any guidance on the sales or production plan of the company.

Maruti Suzuki upcoming car, SUV launches: 2024 and beyond

Having spruced up its SUV game, Maruti Suzuki is looking to strengthen its core compact car segment with an all-new Swift and Dzire during the current financial year. It will also add a bigger sibling of Grand Vitara which is likely to be produced out of its upcoming Kharkhoda facility in Haryana.

The company will be getting into the electric vehicle segment in the second half of the current financial year. The first batch of production of electric vehicles will be exported to the markets of Europe and Japan.