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Maruti Suzuki Kharkhoda plant to reach full capacity of 10 lakh units

May 21, 2022
Maruti Suzuki India Limited (MSIL) recently said its new 800-acre plant in Kharkhoda, Sonipat, Haryana, has space to expand and will reach its peak production capacity of 10 lakh units in the next 8 years, requiring a total investment of INR 18,000 crore.

The company has presented a cheque of INR 2,131 crore to Haryana State Industrial and Infrastructure Development Corporation Ltd (HSIIDC). In the first phase it has invested INR 11,000 crore with a production capacity of 2.5 lakh units. The investment includes the land, the car manufacturing plant and some common infrastructure and facilities for future plants.

According to Maruti Suzuki, the first phase of the new plant will commence from 2025, followed by the second phase in the later part of 2026. The plant is built for expansion to meet the demand in the domestic and exports market.

Meanwhile, the country’s largest carmaker, which will bring its first electric car in 2025 shared that the Kharkhoda plant will not cater to the manufacturing of electric vehicles (EVs).

It is only when Suzuki finds that the production requirement for EVs has gone up so much that the Gujarat plant cannot handle, then we will have to look at alternatives- whether it is Manesar, Kharkhoda or somewhere else. The production has to start in Gujarat first, the capacity has to be fully utilized and only then we can think of something else. At the moment, the Kharkhoda plant will not make EVs,” RC Bhargava, Chairman, MSIL, told ETAuto.

Its parent company, Suzuki Motor Corporation in March this year invested INR 10,440 crore for local manufacturing of EVs and BEVs in its Gujarat plant.

The new site is the carmaker’s fourth manufacturing facility following its two plants in Haryana- Manesar and Gurugram, and Suzuki’s plant in Gujarat. Maruti Suzuki also has an R&D center in Rohtak.

The company had been planning to move its Gurugram plant production where it says congestion has increased in the nearby residential area over the years. However, “since the Kharkhoda plant will take about 7-8 years to built up, there will be no immediate change in the Gurugram production facility and it will continue to operate as usual."

Meanwhile, the Haryana state has a private job reservation law making it mandatory for employers in the State to reserve 75% of jobs paying less than INR 30,000 a month, for local candidates. On receiving opposition from industrialists, the State government, which had originally set the upper limit to INR 50,000, later revised it to INR 30,000. The state also had the condition that local candidates would be only those who have resided in the State for the past 15 years, however this was also later revised to 5 years.

Suzuki Motorcycle India will also get a 100-acre land at the new Kharkhoda site. The company has handed over a cheque of INR 266 crore for the land allotment to HSIIDC.

The investment in the two-wheeler plant by Suzuki Motorcycle India will be separate and will be announced in due course,” Kenichi Ayukawa, Executive Vice Chairman, Maruti Suzuki.

The company recently said that it is working on strong hybrids for the country. However, hybrid cars attract a total tax of 43%, inclusive of GST, in the country, as against battery electric vehicles with a tax of 5%. Bhargava said that they are lobbying with the government however there has been no result.

Hybrids will improve the fuel consumption by 30%-35% which means carbon content comes down to that extent. I am not sure of the figures but I don’t think with the current energy supply in India, even EVs will lower it by 35% due to the coal factor. The government has given all kinds of incentives to electric cars, but there is nothing for hybrids and CNG. They are convinced that electric cars are the best answer for India. It is not.

The leader of small cars in India believes that the government’s draft notification about mandatory six airbags in cars can lead to upsetting the demand scenario in the segment.

I don’t even know if six airbags will fit in the small cars because they are not meant for small cars. We will have to find that out. It will certainly cause a further setback to the sales of small cars. Putting four extra airbags would be a substantial cost.

According to him, if inflation continues to rise, this will have an impact on consumer’s demand for small cars because their focus will shift to buying necessary items first while deferring their car purchase decision.

Expecting most of the semiconductor supply issues to ease out by next year, Maruti Suzuki said it currently has a backlog of about 3.5 lakh car bookings.

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