The expansion spree in the Maruti Suzuki camp is brisk and an investment of Rs1700 crore has been ratified. By this the production will be increased to 250000 cars per year from the current 1 million units, from April 2012. The facelift will be at Manesar facility which has already got an investment of $215 million by getting production increase to relieve Gurgaon unit. Manesar plant, currently delivering 600000 units will be upgraded to double the production.
Maruti faces stiff competition from Toyota and Honda in small car segment. Hence the need to increase the production in addition to launch of 5-seater Eeco (Rs259000). The small car segment dominates the car market with 75% and India turns to be the 3rd largest market in this segment. GM made its presence felt with its Beat; Ford and Volswagen will follow the suit soon. One such car from a JV between Fiat-Tata may materialize in 2012.
Maruti holds nearly 50% stake in Suzuki and equal amount in the Indian car market, thereby accruing a quarterly net profit of 6.88 billion rupees. The factors that backed this profit were the slow pace in the previous year, government’s reliefs and easy credits. The price, decided by the commodities, favoured the sale increase.