Maruti eyes expansion to defend 50% share

To double annual production capacity at Manesar plant

Car market leader Maruti Suzuki said at the Auto Expo today that it aimed to jack up its total output by 50 per cent to 1.5 million units in five years.

The strategy is for defending its market share in India, where almost one in two cars sold is a Maruti.

The company plans to double the annual production capacity at its Manesar plant to 600,000 units, which will entail further investments by the company. Meanwhile, the capacity at the older Gurgaon plant is being increased to 70,000-80,000 units, with an additional investment of Rs 130 crore. The company had expanded the capacity of this plant to 700,000 units earlier.

As many as six multi-national companies — Volkswagen, General Motors, Ford, Toyota, Honda and Nissan — will launch their compact cars in the country to challenge Maruti’s dominance in the segment. Most of these launches will happen in the high-volume, high-margin upper compact segment.

Maruti Suzuki MD Shinzo Nakanishi said: “Starting this year, there will be very high pressure on us from all sides, including pressure from (commodity) prices and from competition. But, we will do everything to defend our 50 per cent market share. We will try to absorb the price increase as much as possible.”

Maruti Suzuki will be discussing the expansion of the Manesar plant at its next board meeting and may seek approval from the board members. It will have to put in additional funds to expand capacity. But Nakanishi refused to provide a figure.

Indian engineers of the company are working on a new compact car, which will be based on an existing small car platform. The project will require an investment of Rs 300-400 crore. This will be an all-India made car from the company.