Suzuki To Invest Additional Rs. 3800 Crore In Gujarat For Third Car Plant

There are big ticket investments by Japan's Suzuki Motor Co coming into India in the immediate future. Suzuki Chairman Osamu Suzuki has announced a third car plant at the company's existing manufacturing site in Gujarat. The Rs. 3800 crore investment being laid out will see a third manufacturing line being set up by Suzuki at its Hansalpur facility near Mehsana, Gujarat. The site already houses what Suzuki calls 'Plant A' which commenced operations at the start of this year. This plant has an installed annual capacity to produce 250,000 units. Suzuki had announced in 2012 that its intended to go to Gujarat with a total investment of Rs. 9600 crore ($1.5 bn). As part of that plan Suzuki had said there would also be a 'Plant B' with the same capacity, which is already under construction and expected to be ready in 2019. Suzuki has now announced a fresh investment of approximately Rs. 3800 crore ($ 0.6 billion) to construct 'Plant C' with an installed capacity to make a further 250,000 cars per year. This would take Suzuki's total capacity in Gujarat to 750,000 cars a year and also take total investment in the state to Rs. 13,400 crore ($2.1 billion). Combined overall production across plants in Gujarat and the previous factories in Haryana would then be 2.25 million units. Construction for the new plant will commence depending on market conditions and demand for products both in local and global markets.

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It must be noted that Suzuki owns the plants in Gujarat directly as a separate business unit - Suzuki Motor Gujarat - a separate company that supplies cars to its other subsidiary Maruti Suzuki, as well as Suzuki business worldwide. Plant A in Gujarat already makes the Baleno and has begun exports earlier this year too. Meanwhile the production facilities in Haryana - in Gurgaon and Manesar are owned and operated by Maruti Suzuki directly.

Suzuki has also made a separate announcement on the lithium ion battery manufacturing Joint Venture (JV) it has with Toshiba and Denso. The JV will invest Rs 1151 crore ($180 million) and will begin supplying batteries to the car business by 2020. The batteries will primarily be used by Suzuki for its car models; however the JV would be open to supplying batteries to other OEMs as well. Read more on the JV related announcement here.