Maruti plans to invest up to Rs 18,000 crore for 10 lakh unit plant

New Delhi: Maruti Suzuki is lining up the country’s largest single-location automobile investment as it plans to pump in up to Rs 18,000 crore for a new factory premises in Haryana, which may have a peak annual capacity of 10 lakh units, Maruti Suzuki chairman R C Bhargava told TOI.

The greenfield location — which may be spread over 700-1,000 acres — would come as a replacement to its old (and first) factory located in Gurugram, but the company is wary of the state’s new policy that has mandated 75% job reservation for the locals in business and factory establishments.

“We have a plan to invest Rs 17,000-18,000 crore. The total capacity that we are planning is between 7.5 lakh and 10 lakh cars per annum. This is the scale that we are looking at.” Bhargava said the company “would like to shift quickly” to the new location, but pointed to a series of issues.

The initial delay in the new factory’s plans was due to the outbreak of the coronavirus. “It went in cold storage due to Covid last year. Now again, it’s being reviewed. But we have an additional issue to sort out. Haryana’s local job reservation policy, which we are looking into,” the Maruti chairman said. “We are concerned about it. We are talking to them, (and) asking the state government to work out a solution, which can make everyone happy.”

He said the issue had already been raised by top industry chambers, including CII. “This (75% reservation for the locals) is not a step which will promote investments or competitiveness. The entire industry feels this way, and has spoken about it. Discussions are on with the state government.”

The company has decided to shift its Gurugram plant, spread over 300 acres, because of space constraints. Since the premises falls around residential areas, the locals face lot of hardships due to the movement of trucks.

It is understood that the company has also been approached by some other states for the large investment. But Maruti is keen to invest in Haryana, unless the local reservation issue plays a spoiler.

Source: https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/maruti-plans-to-invest-up-to-rs-18000-crore-for-10-lakh-unit-plant/84396901