Maruti to invest Rs4,100 cr in FY13

 

By 2014 the company’s overall diesel engine capacity will be 700,000 units annually, said RC Bhargava, chairman, Maruti Suzuki

New Delhi: Country’s largest car maker Maruti Suzuki India Ltd said on Saturday that it will invest Rs4,100 crore in the next fiscal year largely to increase its capacity for diesel engines, research and development (R&D) work and expansion of vehicle manufacturing capacity.


The company will invest Rs900 crore for its first diesel engine plant, which will come up at its Gurgaon plant by the middle of 2013, it said. The plant will have an initial capacity of 150,000 units of diesel engines annually. Mint reported this on 14 December.




“Diesel car demand will continue to grow in India,” RC Bhargava, chairman, Maruti Suzuki said after company’s board meeting.
“The extent of the growth will depend on the capacity one has for diesel engines,” he added.


The company said its diesel engine plant at Gurgaon will also go for a second phase of expansion, which will take its overall capacity to 300,000 units. This expansion will require an investment of an additional Rs800 crore that will be made in the next financial year.


Bhargava said the sales of diesel cars have grown by 35% in FY12 while the company sold 15% fewer petrol cars in this fiscal.


By 2014, he said, the company’s overall diesel engine capacity will be 700,000 units annually. These include 100,000 units every year, which it sources in on a contract basis from Fiat India Powertrain Ltd. Suzuki Powertrain India Ltd, a 70:30 joint venture between Suzuki Motor Corp and Maruti Suzuki, supplies 300,000 diesel engines to Maruti’s operations.


Bhargava said that petrol cars will see a de-growth even in FY13. “But we will still be able to grow at 10%,” he said. “As we will be selling 50,000 less petrol cars but 150,000 more diesel cars.”


The car maker will also spend Rs900 crore on its R&D facility in Rohtak. Rest of the Rs4,100 crore will be invested on plant C at its Manesar unit, which will come up by the end of 2013.


The company will take a final call on its Gujarat plant by June this year while it will finalize the land purchase deal in the next 6 weeks.