Maruti Suzuki India (MSI) on Thursday said its new manufacturing facility in Haryana, the company's third in the state, would reach a peak production capacity of 10 lakh units per annum in the next eight years entailing a total investment of Rs 18,000 crore.
The new facility, which would come at an 800-acre site at IMT Kharkhoda in Sonipat district, will entail a total investment of Rs 11,000 crore in the first phase with a production capacity of 2.5 lakh units per annum.
The first set of vehicles is expected to roll out from the facility in 2025. Speaking at an event here to mark the formal announcement of land allotment to the auto major, MSI Chairman RC Bhargava said the 10 lakh production capacity at the Sonipat plant would help in catering to the demand in both domestic as well as export markets.
"We expect, subject to market conditions in India being favorable we will be able to reach our peak production capacity in the Sonipat plant in eight years. The plant will then become the largest site in the country with the production capacity of 10 lakh cars," he noted.
The success of Suzuki in India has actually led to the strengthening of economic ties between India and Japan, Bhargava said.
He noted that the success of MSI shows that there is no alternative but for governments and the private sector to work together with mutual trust.
"Unfortunately there are still people in the country who do not accept this is the best way possible and they don't expect that having such kind of industrial growth and with state government participating in the success of industrial management and in the creation and of more competitive manufacturing, everybody benefits," Bhargava noted.
Poverty is eradicated and new jobs are created if both work together, he added.
Currently, MSI has a cumulative production capacity of around 22 lakh units per annum across its two manufacturing plants in Haryana and parent Suzuki Motor's facility in Gujarat.
The two plants in Haryana -- at Gurugram and Manesar -- together roll out around 15.5 lakh units per annum. Its parent Suzuki Motor Corp has also set up a facility in Gujarat with an installed production capacity of 7.5 lakh units per year after the third unit started production in April last year.
All units produced at Suzuki Motor Gujarat Pvt Ltd (SMG) are supplied to MSI. The automaker also has an R&D center in Rohtak, Haryana.
MSI Executive Vice Chairman Kenichi Ayukawa said the growth of Maruti Suzuki and the prosperity of the people of Haryana were interlinked.
"When Suzuki Motor Corporation started operations in Haryana, India was not on the global car manufacturing map. Today, India is the fourth largest car manufacturer in the world. And we hope that in the coming years, India will become the third-largest car manufacturer, globally," he stated.
He noted that Haryana has played a stellar role in the growth of the company over the years helping it become the country's leading carmaker.
"So, we are happy that Haryana is one of the top locations for car manufacturing, not just in India, but the world. Today, we sign the agreements with the Haryana government for the allotment of 800-acre land to Maruti Suzuki and 100-acre land to Suzuki Motorcycle India Private Limited. Maruti Suzuki will start construction work on the car manufacturing plant immediately," Ayukawa said.
With the support of the state government, the first plant, with an annual capacity of 2.5 lakh vehicles, is expected to be commissioned within the year 2025, he added.
Phase 1 of the project will have an investment of about Rs 11,000 crore, Ayukawa said. This includes the land, the car manufacturing plant, and some common infrastructure and facilities for future plants, he added.
MSI presented a cheque of Rs 2,131 crore to Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC). Besides, Suzuki Motorcycle India, which will get a 100-acre plot at the new facility, handed over a cheque of Rs 266 crore for the land allotment.
Hailing the importance of Maruti for Haryana, Chief Minister Manohar Lal Khattar said, "Maruti has been like Hanuman for Haryana that catapulted the state's industrial growth. We account for ...at least 50 per cent of the country's automobile industry and all this is possible with our close association of 40 years."
"We have the best infrastructure and our industrial area is nearer to the airport and we keep on revising our policies for encouraging industry. The Maruti association exemplifies it," added Khattar.
Speaking at the event, Haryana Deputy Chief Minister Dushyant Chautala said the state government has worked with the industry to solve the contentious issue of 75 per cent job reservation for locals.
"We had a long discussion with Bhargava looking into that aspect that 75 per cent reservation for local candidates may affect the industry. But we sat multiple times and discussed it. Now we can proudly say that we worked together to reduce minimum pay from Rs 50,000 to Rs 30,000," he noted.
Local employment will help the state move towards greater prosperity going ahead, Chautala said.
Haryana government Principal Secretary Industries and Commerce Vijayendra Kumar said Maruti Suzuki and Suzuki Motorcycle have committed Rs 18,000 crore and Rs 1,466 crore investment for the Sonipat site.
The facility would provide direct and indirect employment opportunities to over 13,000 people, he added.