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Maruti eyes 2 million cars a year with 2 more plants

autos Updated: Dec 23, 2010 01:56 IST
HT Correspondent

The country's largest car-maker, Maruti Suzuki India Ltd, on Wednesday said its cumulative production may reach 2 million units by 2014-15, an over 66% jump over current levels, as its two new assembly plants at Manesar become operational by 2012.

The firm had earlier this year announced that it was setting up two 250,000 units-per-annum assembly plants at Manesar that would take its installed capacity to 1.44 million units per annum. Currently, Maruti has three plants in Guragon with a total installed capacity of 643,000 units and a 300,000-unit plant in Manesar.

Maruti however is reputed to produce much more than its installed capacity at each of its plants on account of high flexibility at the assembly lines that ensure better utilisation.

"This year we have been surprised by the pace of growth in the industry but thanks to our innovations at the production level we have managed to add 200,000 units capacity without investing in a new plant," said Shinzo Nakanishi, managing director and CEO, MSIL.

By the end of this fiscal in March, Maruti would have produced over 1.2 million cars with Gurgaon accounting for over 900,000 units.

The car-maker said capacity can be further enhanced to 10 lakh from Gurgaon alone and Manesar would have similar production levels once all three plants become operational.

"Our endeavour would be to produce 1 million cars from Gurgaon and though Manesar will have an installed capacity of 800,000 with its 3 plants we hope to achieve similar levels there as well," said MM Singh, managing executive officer (production), MSIL.

In the first 8 months of this fiscal, Maruti's car sales have grown by 26.5% to 620,000 units. The industry however, grew at a faster clip of 32% resulting in Maruti's marketshare falling below the psychological 50% mark. The company remained unsure whether it can reclaim that position next year.

"If the market continues to grow the way it has this year, then our share may fall but if it shrinks then it will go up," Nakanishi said. "Next year would be tight for us because of production constraints as our new capacity at Manesar would be available only in the second half. So our marketshare may go down further but I do not mind that because our volumes would still be higher."

Next year, the firm will venture into premium sedan segment with the Kizashi, the most expensive car from the Maruti stable with a price range of R16-18 lakh. It will also bring in a diesel version of its mid-sized sedan SX4 and the new Swift.