Maruti to invest $1.8 bn

INDIAN AUTOMOBILE INDUSTRY IN OVERDRIVE

Khattar to retire, Chairman Nakanishi to become MD.

India's largest car-maker Maruti Suzuki India Ltd today announced a fresh investment of $1.8 billion to achieve its target of producing one million cars by 2010-11.

The announcement came even as the board approved significant top management changes. Jagdish Khattar, current managing director, will retire on December 18 once he turns 65, ending speculation about his extension.

Khattar's place will be taken by current chairman Shinzo Nakanishi. R C Bhargava, who is a director and a former managing director, has been named the new chairman.

Sources say Khattar was offered an extension but he declined.

The bulk of Maruti's fresh investment will be in a research and development (R&D) facility, for which the company has applied to the Haryana government for 500 acres near Manesar.

"The investments will ensure our supremacy in the Indian market," said Osamu Suzuki, chairman of Suzuki Motor Co, Maruti's principal stakeholder. The R&D centre would be used to design both cars and engines that are sold in India, he added.

Apart from R&D, the company will invest in a spare parts depot, stockyard, showrooms and a vehicle-testing facility.

Maruti, which sells 660,000 cars annually and has an over 50 per cent market share, announced investments of about $2 billion last year to increase the annual capacity of its Gurgaon plant from 550,000 to 700,000 and the new plant in Manesar from 100,000 to 300,000.