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Maruti Suzuki to acquire Japanese parent’s Gujarat plant

Carmaker's board approves acquisition of Suzuki Motor's Gujarat plant, aiming to nearly double its production by FY31

Maruti Suzuki to acquire Japanese parent’s Gujarat plant
[Source photo: Chetan Jha/Press Insider]

Maruti Suzuki India Ltd is buying its Japanese parent’s plant in Gujarat, the nation’s biggest carmaker told the exchanges on Monday.

The auto maker said its board okayed the acquisition of Suzuki Motor Gujarat Pvt. Ltd from Suzuki Motor Corp. 

The carmaker said the mode of acquisition and financial details will be finalized at its next board meeting, and is subject to regulatory approvals, it said in the filing.

Maruti Suzuki will need to increase its production capacity to about 4 million cars per annum by FY31, almost double from current levels, as the Indian car market grows exponentially, the carmaker said in a release.

“Managing this scale and complexity of production with multiple powertrains, under different managements, would pose several challenges, the auto maker said, adding that “several powertrain technologies such as electric vehicles, hybrids, CNG, ethanol will co-exist for a reasonably long period of time given the carbon neutrality requirements.”

Maruti Suzuki had a contract manufacturing agreement with Suzuki Motor Gujarat Pvt. Ltd (SMG).

“In terms of actual production, logistics, sales and the cost thereof, there will be no change as the cars earlier supplied by SMG as a contract manufacturer, will now continue to be supplied as before,” the company added.

Meanwhile, the auto maker posted a first-quarter profit of ₹2,485 crore ($303 million), in line with analysts’ estimates, on an easing semiconductor crisis.  Revenues rose 22% to ₹32,327 crore.

Shares of Maruti Suzuki ended 1.4% higher at ₹9,806.25 on Monday.

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