Maruti Suzuki to invest Rs 4,960 crore in Gujarat land for capacity expansion

Maruti Suzuki on Monday said its board has approved an investment of Rs 4,960 crore to acquire land in Gujarat as part of a plan to expand vehicle manufacturing capacity, according to a regulatory filing. The country’s largest automaker said the land in the Khoraj Industrial Estate will be acquired from the Gujarat Industrial Development Corporation and will support a proposed capacity expansion of up to one million vehicles per year. The timelines and total capital expenditure for the expansion will be finalized later as the company rolls out the project in phases.

The approval comes as Maruti Suzuki’s factories are already running at full capacity. The company currently has an installed capacity of around 24 lakh units per annum at its plants in Gurugram, Manesar, Kharkhoda and Hansalpur, with a production capacity of 26 lakh units, all of which are fully utilised.

Shares of Maruti Suzuki fell 0.7% to Rs 16381.80 at 10:24 am.

The move signals the automaker’s intention to capture production space early, at a time when demand is high and supply constraints can quickly translate into lost market share.

The company said the expansion is driven by growth in market demand, including exports. Financing for the land acquisition, development and preparatory works will be provided through a combination of internal accrual and external loans.

Maruti has built a substantial manufacturing base in Gujarat in recent years, leveraging the state for both domestic production and exports. The additional land provides scope for future capacity expansion as Maruti Suzuki’s existing plants are operating at full capacity.