The country's largest carmaker Maruti Suzuki is understood to have considering setting up a third plant at its Manesar unit that can entail an investment of about Rs 1,700 crore.
According to industry sources, the company is mulling an additional plant that will have an annual capacity of rolling out 2.5 lakh units per year.
At present, the company is investing a similar amount of Rs 1,700 crore to increase the capacity at its Manesar plant by 2.5 lakh units that will be operational by 2012.
"The third plant at Manesar is likely to have almost the same investment and capacity like the second one," a source said at the Society of Indian Automobile Manufacturers (SIAM) summit here today.
When contacted a Maruti official declined to comment saying that the company is currently focusing on the second plant.
Maruti Suzuki India's Manesar plant has annual production capacity of three lakh units, while the Gurgaon plant produces seven lakh units per annum.
Recently the company's Managing Director and CEO Shinzo Nakanishi had stated that the Indian car market is likely to double to five million units by 2015 and the company needs to be prepared to meet the growing demand in order to maintain its leadership position.
According to SIAM, the market leader sold 2,82,488 cars during the April-July period this, representing a 47.68 per cent share in the overall 5,92,405 units market.
In the comparable year-ago period, MSI had a 53.13 per cent share in the 4,40,069 units car market, with sales of 2,33,811 units.
However the company was hopeful to regain an over 50 per cent share of the domestic passenger car market by the end of this fiscal.