Maruti, dealers may invest Rs 30k cr to sell 3-mn cars a year

Country's largest carmaker Maruti Suzuki India (MSI) and its dealers could invest up to Rs 30,000 crore to double its infrastructure, including establishing new dealerships, as it aims to sell 3 million cars annually.
While the company did not set a time line for selling 3 million cars annually, it has stated that it is looking at selling 2 million cars a year by 2020.
"I see Maruti investing money in R&D, in building and all the required infrastructure for selling larger and larger volume of cars because if we are to sell 3 million cars we have to double this entire infrastructure," MSI Chairman RC Bhargava told reporters here.

When asked by what time the company aims to sell 3 million cars annually, Bhargava said: "Maybe 8,9 or 10 years. I really don't know. It will depend on the market conditions."
The same infrastructure that exists today cannot sell 3 million cars so the company needs to invest in creating that infrastructure, he added.
Bhargava said the infrastructure that MSI has created since 1983 cost around Rs 11,000 crore. MSI currently has around 1,700 dealerships across the country and has also set up an R&D centre at Rohtak in Haryana.

"The cost today, when we start doubling this infrastructure from 2016 is going to be much much higher and that figure which we have estimated could be something close to Rs 25,000 crore to Rs 30,000 crore," Bhargava said.

Part of the total envisaged investment will be done by dealers and part of it by the company, he added.
The Indian car market leader currently has a production capacity of 1.5 million across its two manufacturing sites in Gurgaon and Manesar.
Bhargava said that the company would be launching models frequently in the domestic market.
"The average life of a model these days is six years. A product is required to be replaced every six years. Every three years a model needs to refreshed or minor changes. So today we have 14-15 models, one sixth of them will be replaced every year and another one sixth would be refreshed every year," he said.