India’s largest car manufacturer Maruti Suzuki India Ltd (MSIL) on Tuesday said its plans to set up a new manufacturing base in Gujarat will miss its March 2016 target due to the acute slowdown in the domestic automobile industry.
The company said it was going slow on the project and a fresh deadline would be set only when demand for cars recovers in the country.
“It is unlikely that we would be able to commission the Gujarat plant even by the end of financial year 2016,” said RC Bhargava, chairman, MSIL. “The slowdown in the auto sector is very acute. We are trying to access the sales projections and would accordingly decide on when to set up the factory.”
Passenger car sales in India fell for a record ninth month in a row in July, the worst stretch in its history. During the first four months of this financial year Maruti’s sales have fallen marginally at 271,063 units compared with 273,076 units in the same period in 2012. In fiscal 2012-13, it has registered a 0.7% increase in domestic car sales.
“All the indications are that the GDP will grow below 5%, the rupee is at an all time low, we do not see any change in the fundamentals. The situation will remain as difficult as before,” Bhargava said.