The country's largest car maker Maruti Suzuki India is planning to shift production of about 300,000 vehicles from Gurgaon to decongest the old plant as soon as the two new units at its Manesar facility come up.
The Gurgaon facility has three units and currently produces nearly 950,000 units a year. Once the vehicle output is trimmed at the facility to 600,000-650,000 units, the company aims to utilise the idle space and workforce to produce more engines and other parts there.
"The Gurgaon facility is very congested and old. We need to reduce some production there. The plan is to reduce the output to 600,000-650,000 units annually," Maruti Suzuki India (MSI) Chairman R C Bhargava told PTI.
The company had rolled out about 950,000 units from Gurgaon in 2010-11 out of a total installed capacity of 850,000 units at three plants in the complex, spread over 300 acres of land. It produces models like Swift, M800, Omni, WagonR, Ritz, Alto, Eeco and Gypsy there.
"We will shift the excess production to Manesar from Gurgaon... From the two new upcoming plants in Manesar that will have a total installed capacity of 500,000 units, we should be able to do 700,000 units," Bhargava said.
At present MSI is setting up two new units inside its Manesar facility at a total investment of Rs 3,625 crore. The existing plant there produced about 350,000 units in 2010-11.
The two new plants in Manesar will have a capacity of 250,000 units annually each. The company is aiming to open the second unit by September-October this year, while the third one is scheduled to be operational in 2012-13.
On by when the company will start trimming its production in Gurgaon, Bhargava said: "We would like to do it as soon as we can do. It will depend on creation of new capacity and market demand."
Besides vehicles, the Gurgaon facility also produces engines, making about 700,000 units a year of the K-Series engines and about 450,000 units per year of F, G and M-Series engines.
Elaborating on how the company plans to utilise the idle space post-decongestioning Gurgaon, Bhargava said: "It will be mainly used for parts production. We will produce more engines and will ramp up the capacity."
When asked by how much the engine capacity will be increased, he said: "We have not decided it yet, but it will obviously be matched with the level of car production."
Besides Gurgaon, a separate entity -- Suzuki Powertrain India Ltd -- produces diesel engines at the Manesar facility. It has a capacity to roll out 300,000 units a year.
MSI is also considering to set up its 7th plant, over and above the two upcoming units in Manesar, as it aims to sell up to three million cars a year by 2015-16.
Maruti's present overall vehicle capacity is 1.2 million units. Once the two new units at Manesar become operational by 2012-13, its total capacity will go up to 1.7 million annually.
In 2010-11, the company's sales soared 24.81% to 12,71,005 units from 10,18,365 units in the previous fiscal. Domestic sales increased by 30.08% to 11,32,739 units from 8,70,790 units in the previous fiscal.
MSI's passenger car sales during last fiscal jumped by 26.24% at 9,66,447 units from 7,65,533 units in FY10. However, its market share in this segment fell to 48.74% from 50.09% in 2009-10.
Besides the fresh investments at Manesar, MSI is investing Rs 2,500 crore for its K-Series engine plant and setting up a dedicated R&D facility at Rohtak.
Earlier, the company had announced to hire at least 2,300 people, mainly for its upcoming two new plants in Manesar, within next two years.
At present, MSI, which is 54.2% owned by Suzuki Motor Corp employs 8,617 people as on March 31, 2011.
