Maruti Suzuki to Establish Second Plant in Gujarat
Maruti Suzuki approves land acquisition for a second plant in Gujarat.
Photo by Adrian Balasoiu
The Board of Maruti Suzuki India Ltd. (MSIL) has approved the acquisition of land at Khoraj Industrial Estate in Sanand, Gujarat, for expanding production capacity. This will be the company's second plant in Gujarat, with the first being at Hansalpur.
The existing capacity is around 24 lakh units per annum, with a capability to produce 26 lakh units. The proposed capacity addition is up to 10 lakh units per annum and will be operational in phases. The board has approved ₹4,960 crore towards land acquisition and development, financed through internal accruals and external borrowings.
The new plant is aimed to start operation in FY29 with a total investment of ₹35,000 crore.
Key Facts
Land acquisition approved in Gujarat
Second plant in Gujarat
Capacity addition: 10 lakh units per annum
Investment: ₹35,000 crore
UPSC Exam Angles
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
GS Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
Potential questions on industrial policy, investment trends, and economic growth.
Visual Insights
Maruti Suzuki's Manufacturing Plants in Gujarat
This map shows the location of Maruti Suzuki's existing plant in Hansalpur and the new proposed plant in Khoraj Industrial Estate, Sanand, Gujarat. It highlights Gujarat's importance as a manufacturing hub for the automotive industry.
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More Information
Background
The history of Maruti Suzuki in India is intertwined with the liberalization of the Indian economy in the 1980s. In 1981, Maruti Udyog Limited was established as a joint venture between the Government of India and Suzuki Motor Corporation of Japan. This partnership aimed to modernize the Indian automobile industry and provide affordable, fuel-efficient vehicles to the growing middle class.
The Maruti 800, launched in 1983, revolutionized personal transportation in India, becoming a symbol of aspiration and mobility. The success of Maruti Udyog paved the way for other foreign automobile manufacturers to enter the Indian market, fostering competition and innovation. Over time, the government gradually reduced its stake in the company, eventually leading to Suzuki becoming the majority shareholder.
The company's journey reflects the evolution of India's economic policies and its integration into the global economy.
Latest Developments
In recent years, the Indian automobile industry has been undergoing a significant transformation, driven by factors such as increasing environmental concerns, technological advancements, and changing consumer preferences. The government's push for electric vehicles (EVs) and stricter emission norms (BS-VI) have prompted manufacturers to invest heavily in developing alternative fuel technologies and cleaner vehicles. Maruti Suzuki has also announced plans to introduce EVs in the Indian market.
Furthermore, the industry is witnessing a growing trend towards connected cars and autonomous driving features. The COVID-19 pandemic disrupted supply chains and impacted sales, but the industry has shown resilience and is gradually recovering. The future outlook for the Indian automobile industry is positive, with strong growth potential driven by rising disposable incomes, urbanization, and infrastructure development.
Practice Questions (MCQs)
1. Consider the following statements regarding the Indian automotive industry: 1. India is currently the third largest automobile market globally. 2. The Automotive Mission Plan (AMP) 2016-26 aims to make India among the top three automotive nations in the world in terms of engineering, manufacturing and exports. 3. The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme is aimed at promoting the manufacturing of only electric two-wheelers. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: A
Statement 1 is correct as India is a major automobile market. Statement 2 is correct as it reflects the aims of AMP 2016-26. Statement 3 is incorrect as FAME scheme covers all types of electric vehicles, not just two-wheelers.
2. With reference to Foreign Direct Investment (FDI) in India, consider the following statements: 1. FDI is prohibited in the atomic energy sector. 2. FDI up to 100% is permitted under the automatic route in most sectors except for a few prohibited sectors. 3. FDI inflows are considered in calculation of Current Account Deficit. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: D
All three statements are correct. FDI is prohibited in atomic energy. 100% FDI is permitted under the automatic route in most sectors. FDI inflows are considered in the calculation of the Current Account Deficit.
3. Which of the following committees/commissions is/are associated with industrial development in India? 1. Abid Hussain Committee 2. Rakesh Mohan Committee 3. N.K. Singh Committee Select the correct answer using the code given below:
- A.1 only
- B.1 and 2 only
- C.2 and 3 only
- D.1, 2 and 3
Show Answer
Answer: B
The Abid Hussain Committee is associated with small-scale industries. The Rakesh Mohan Committee is associated with infrastructure financing. The N.K. Singh Committee is associated with the FRBM review.