Maruti to set up its largest manufacturing facility in Haryana

Maruti Suzuki has drawn a major expansion plan in India. The carmaker is setting up its largest manufacturing facility in Kharkhoda, Haryana after inking a land allotment deal with Haryana government today.

Maruti Suzuki plans to invest Rs 18,000 crore in the plant, which will be spread across 800 acres. An additional 100 acres has been allotted to Suzuki Motorcycles, which will see an investment of around Rs 1,500 crore. The new plant is expected to generate a total of 15,000 jobs.

In an interview with CNBC-TV18, RC Bhargava, the Chairman of Maruti Suzuki, said, “The land cost is around Rs 2400 crore. The board has approved the initial phase 1 investment of Rs 11,000 crore, which includes the land cost. This plant will include the first line of 2,50,000 cars. It will include a certain number of supporting ancillary activity. It will also include the civil works for the second line of 2,50,000 cars so that we can start building the second plant a little bit earlier than what would otherwise be possible.”

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Bhargava said he expects the first plant to be ready by 2025. “The first plant is expected to come in 2025, while the second could probably come towards the end of 2026. By then, the market would have grown. Today there is shortage of capacity and so we will need all these capacities anyway.”

Bhargava believes that higher inflation and fuel costs will hurt the demand for entry-level cars. "The entry-level consumer market in India has shrunk by 28 percent in the last three years. Higher inflation and fuel costs will further hurt the entry-level customers, who barely manage to buy a car,” he said.

Speaking about electric vehicles he said, using coal-fired energy for powering electric cars defeats the purpose of bringing down carbon footprint.

“We need to look at how fast we can go in for electric vehicles in India because we are using largely coal-fired energy for powering our electric cars. If the objective of electric cars is to reduce carbon emission and bring down the carbon footprint, I am not sure that we are achieving that purpose at all because electric cars running on coal-fired energy are not clean.”