Maruti Suzuki will invest around Rs.11,000 crore to build its largest-ever auto manufacturing facility in IMT Kharkhoda in Sonepat (Haryana). On Friday, the company completed the land allotment process with Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC).
The first assembly unit on the 800-acre land in Kharkhoda will be complete by 2025. It will have a capacity to manufacture 250,000 vehicles a year. And before the completion, Maruti is likely to begin its second unit in the said land.
Interestingly, the above said land can accommodate another four more plants. Once commissioned, Maruti Suzuki Kharkhoda will have a total capacity of 1 million units of cars a year.
The total investment for the new plants will come through Maruti Suzuki’s international accruals. Accordingly, the company will create a provision in the Capex funds for the next three years — for FY23, the company has already announced an outlay of Rs.5000 crore.
The decision to invest in the new facility in Kharkhoda comes amid a production cut in its Gurugram auto factory. The auto unit was rolling out 700,000 units of cars annually. However, the quantum of production fell to 500,000 units in the past two years due to traffic congestion. Apart from this, Maruti’s Manesar plant has a capacity of 700,000 units, and its parent, Suzuki auto’s plant capacity stands at 500,000 per annum. So in total, Maruti makes about 173,000 cars in a year.
Rahul Bharti, executive director of corporate affairs, Maruti Suzuki, said that his company opted for Haryana, as against other interested states, due to its proximity to the ecosystem of vendors and suppliers. However, future investments will depend on auto sales in India, which have been falling in the last four years.