Maruti Suzuki Confirms New Plant in Gujarat

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Ground-breaking for Maruti's new plant in Gujarat in early 2013

Maruti Suzuki will start the ground-breaking of its new manufacturing facility at Gujarat early this year. Construction is slated to kick off soon after, chairman R C Bhargava told Autocar Professional.

The carmaker has, on its own steam, recently acquired another 500 acres of private land that belongs to farmers and another 100 acres are in the process of acquisition. This land is located about 40km from the first location in Mehsana. Earlier about 640 acres of land in Mehsana district had been given by the government to Maruti for its new manufacturing facility in Gujarat that will entail an investment of over Rs 4,000 crore.

Bhargava says that the company’s component vendors will require another 300-400 acres of land in the vendor’s park with the Japan External Trade Organisation (JETRO) believed to be also setting up a Japanese cluster in the vicinity.

The proposed Japanese cluster, spearheaded by JETRO, has already been given about 1,500 acres in the Becharji-Sanand belt where the new production facilities of Maruti Suzuki and Ford India are coming up. The state government is also believed to be keen to set up another auto cluster in this region. “The second location is for our future expansion. Once we exhaust the capacity at the first site,

we will move to the second one. Maruti requires around 1,000 acres of land for its requirements. The rest of the land can be utilised by the vendors,” says Bhargava.

He agrees that with new Japanese component suppliers coming to India and setting up base in Gujarat, some of the pressure on imported components would be eased off. Natural disasters in Japan two years ago had put the pressure on Maruti to look out for alternative vendors in India to source some critical parts.

Bhargava is not very optimistic of the India market experiencing any major improvement in 2013-14 with Maruti growing at around 6-7 percent. The carmaker expects to close the current fiscal with a sales growth of around 6 percent over 2010-11.

Autocar Professional

 

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Maruti Suzuki's market share slips to a new low

India's largest carmaker Maruti Suzuki continued to lose ground in 2012 when its market share slipped to a new low because of factors including declining sales of entry-level petrol cars, increasing competition and, mostly, labour trouble at its Manesar plants.

Company officials and most analysts attribute the slip in Maruti's market share to 37.76% in calendar 2012, down from 44.64% in 2010, to violent labour troubles at Manesar, but some also point to the falling demand at the firm's stronghold of entry-level macro car segment as customers turned to diesel-powered cars on rising petrol prices.

Mayank Pareek, COO (marketing & sales) at Maruti Suzuki, said the sudden spurt in demand for diesel vehicles was unexpected. "The dynamic shift towards diesel surprise us, but we gradually managed to fill the gap and outsourced the technology to cater to this increased demand," he said.

The top carmaker did not miss the diesel rush though, with its Swift hatchback and Dzire sedan remaining the most-loved diesel cars, occupying the second and third slot in the list of top-selling vehicles of 2012. Maruti's new Ertiga multi-purpose vehicle too had a great start, emerging the country's second-highest sold utility vehicle of the year.

But Maruti could not meet the demand for these vehicles partly because the labour unrest forced a month-long lockout at its twin plants at Manesar. Diesel models of Swift and Dzire, in fact, command a premium with customers waiting for weeks to get deliveries.

A bigger problem in 2012, though, was falling demand for micro cars such as the Alto, WagonR, Ritz and Zen Estilo. Alto, the country's top-selling car, reported a 8% fall in sales, while WagonR slipped to fourth in the pecking order, down from being second in 2011, with 8.5% dip in sales (see chart).

Despite the slide in market share, however, Maruti Suzuki still enjoys a huge gap over the second-largest player Hyundai Motor India. "We still have four cars in the top five models sold in India," Pareek said.

And, with some revival in demand for petrol cars of late and Manesar plants resuming normal operations, Maruti is hopeful that it can improve its market share to around 40% this year with the backing of some new launches and a slew of makeovers to excite customers throughout the year.

Maruti is targeting to woo younger customers with its new XA Alpha compact SUV, to follow up on the success of the Ertiga and to cash in on the rush for sports utility vehicles in the country. New offerings in this segment such as Renault Duster and Mahindra XUV500 have been big hits among young Indian consumers.

An analyst tracking the company say that Maruti Suzuki has the potential to maintain its leadership position for a long time, but may need new cars and models to revive its share in the face of increasing competition.

"Maruti has managed to retain its edge even as it was engulfed in a series of erratic problems in past two years," Jai Sharda, managing partner at independent research firm Equitorials, said. He said the carmaker's recent launches have been huge success with the exception of the new Alto 800.

Maruti Suzuki's market share slips to a new low, company officials blame violent labour troubles for it - The Economic Times

 

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Maruti Suzuki to develop two facilities in Gujarat to step up manufacturing

In a move to step up its manufacturing in India, Maruti Suzuki - India's largest carmaker - has decided to develop twin facilities in Gujarat. The company's Japanese parent Suzuki Motor Corporation (SMC) has plans to concentrate on Asian markets following the recent closure of its US operations. Suzuki withdrew from the US market in November last year.

Maruti, the largest subsidiary of Japanese carmaker Suzuki, has charted out its future production model on the lines of Haryana operations, where it operates five plants from two separate locations in Gurgaon and Manesar.

To finalise its Gujarat plans, SMC chairman Osamu Suzuki is making an unscheduled trip to India on January 24 and 25. Maruti is now directly acquiring a 480-acre plot at Ughroz and Ukarade villages in Gujarat from farmers. This is in addition to the 700 acres allotted to Maruti Suzuki for a manufacturing facility in Mehsana by the Gujarat government.

The company plans to invest around 4,000 crore in Gujarat in the first phase that would go into acquiring the land and constructing the proposed plant, which will have an initial annual capacity of 2.5 lakh cars. The company has planned new models for India along with a strategy to export more cars from the modern Manesar factory and the upcoming Gujarat facility.

"We are looking for a second location and the land is being acquired currently. We are saturated in Haryana with no scope of expansion. We would have a similar two-location model in Gujarat that would be developed and expanded in accordance with market demand," Maruti Suzuki chairman RC Bhargava had recently told reporters.

According to a top executive, Maruti has already started the process of acquiring additional land as it has learnt a few lessons from the increased land prices at its Manesar locations. A court order has recently asked the company to pay many times the 20 lakh per acre it shelled out to acquire around 600 acres in 2005. "To avoid further complexities, the company has decided to acquire more land on its own. The acquisition would be done directly from land owners keeping in mind its future needs. Land price have already started moving north in Gujarat," the executive added.

Purchase of new plots of lands is in accordance with the Maruti management's long-term agenda to expand its Indian manufacturing facilities, which will help Maruti meet future market demand in Asia. These new plants will be located around 100 km from Ahmedabad, and will be within a 300-km radius of the Mundra port, which has been developed by Maruti keeping in view its long-term export plans.

 

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MARUTI SUZUKI TO HIRE 1,000 ITI CERTIFICATE HOLDERS FROM GUJARAT ON 30TH JANUARY, 2013

Repeating instances of labour trouble for Maruti Suzuki at its Manesar plant has prompted the car maker to change its recruitment strategy. Previously, Maruti Suzuki used to hire local youth holding ITI certificate holders to be a part of its production workforce at the Manesar, Rohtak and Gurgaon factories. Now though, the car maker plans to hire ITI holders from across the country, as workforce to run the assembly line at its factories in the National Capital Region. Gujarat is one such location from where Maruti Suzuki plans to hire no less than 1,000 workers.

On the 30th of January, 2013, Maruti Suzuki officials will head to the Industrial Training Institute, Kubernagar (Ahmedabad) for recruitment of 1,000 ITI holders. The new recruits will be inducted into the Maruti Suzuki’s Manesar plant, even as the car maker now has 1,000 vacancies in Manesar. The vacancies at Manesar are across a wide range of functions, ranging from automobile technicians and electricians to painters, turners and fitters. These vacancies come on the back of Maruti Suzuki’s decision to sack over 500 workers who allegedly participated in the violence that brought production to a grinding halt at the Manesar plant in 2012 while also leading to the death of a senior Human Resources manager.

Maruti Suzuki to hire 1,000 ITI certificate holders from Gujarat on 30th January, 2013 | IndianCarsBikes.in

 

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Farmers plan to serve 'stop work' notice to Maruti

In what could be the first signs of troubles for the country’s largest car maker, villagers now plan to send a notice to Maruti Suzuki India Ltd to stop work at its site at Hansalpur, Gujarat, where it is setting up a manufacturing facility.

"Already a draft notice has been prepared and villagers are deliberating on the issue and taking legal counsel. Everyone thinks that the coming of the Maruti Suzuki plant at Hansalpur is the root cause of the special investment region (SIR) and are now opposed to having the plant in the region," says a villager in Hansalpur.

Gujarat’s Mandal-Becharaji belt in Mehsana district, where the Maruti plant is coming up, has been notified as an SIR. SIRs are similar to special economic zones, but units established here are not just export-oriented. Apart from commercial and industrial units, such regions can also house residential areas and offer logistic connectivity. Thirty-six of the 44 gram sabhas in the region on May 31 passed a resolution to oppose the status of SIR being given to the Mandal-Becharaji region, apparently over concerns of fertile land being acquired to develop industrial hubs.

"We have already had multiple discussions with the collector of the region and have also sent letters to the company asking them to allow passage to our village. We have asked for land for roads, etc, and also some agricultural land has come inside the plot. However, we are yet to receive any feedback either from the government or the company, and if the construction work continues, then the entire purpose of the opposition might be lost," says Ajmalbhai Thakore, the village chief of Hansalpur.

A senior Maruti Suzuki official said he was not in the know of any such development.

Locals, however, say Maruti, which is in the process of building a boundary wall at the Hansalpur site, has slowed down work in the past few days.

Kanubhai Kalsariya, the rebel former Bharatiya Janata Party legislator, who had spearheaded the villagers' agitation against the Nirma Cement plant at Mahuva, feels at the moment, there is a lot of excitement at the ground level. However the protest would have to be peaceful, he says.

While some enthusiastic villagers claimed they would visit the plant site this week to take down the security cabins, Kalsariya says: "First, the company would be sent a notice intimating them about the opposition and asking them to halt work. But the movement has to be one of non-violent non-cooperation."

He feels the plans of the SIR are still at a conceptual stage, but the Maruti project is at the root of the plan. If the star investment in the area is opposed, the entire SIR plan will fall apart. Adds Ajmalbhai: "Initially, there was no opposition to the Maruti plant, but once we got to know about the SIR, we are worried. If the SIR happens, the entire land of the village would be gone in making way for roads, etc, according to the draft survey map."

The villagers are at the moment building awareness about the adverse impact of the SIR on agriculture and animal husbandry in the region and, in turn, create consensus against the SIR proposal.

Farmers plan to serve 'stop work' notice to Maruti | Business Standard

 

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The slowdown in Indian automotive sector has proved to be another hurdle for the commissioning of Maruti Suzuki’s Gujarat Plant.

The country's largest carmaker Maruti Suzuki India (MSI) today said it will miss the target of commissioning its Gujarat plant due to the ongoing slowdown in the Indian automobile market. "It is unlikely that we would be able to commission the Gujarat plant even by the end of FY16. The slowdown in the auto sector is very acute," MSI Chairman Chairman R C Bhargava told reporters after the company's 32nd Annual General Meeting (AGM) here.

When asked by when the company would like to start work and commission the facility, he said the company is trying to access the sales projections and would accordingly decide. Last year, Suzuki Motor Corp Chairman Osamu Suzuki had visited the site in Gujarat where MSI plans to set up its third plant at an investment of Rs 4,000 crore. As per the original plans, the company had planned to roll out 2.5 lakh cars annually by 2015-16 from the Gujarat plant. MSI is looking at a total annual capacity of 20 lakh units once the Gujarat plant goes on stream.

MSI at present has a total installed annual capacity of about 15 lakh units, which will go up to 17.5 lakh units by September this year when its third unit at Manesar goes on stream. Bhargava said even the company's vendors have not started work at the site in Gujarat so far. "Vendors have not started work at the Gujarat plant because we have not started our work there. They will start only when they know the timeline when we will start and complete our work there. There work and ours go side by side and they do not want their capital lying idle" he added.

Commenting on the current economic scenario, Bhargava said he expects the ongoing fiscal to be another tough year. "All the indications are that the GDP will grow below 5 per cent, the rupee is at an all time low, we do not see any change in the fundamentals, the situation will remain as difficult as before" he said. He added that the only positive factor so far in the year has been the excellent monsoon season and hoped that the upcoming festival season would also be able to spur some growth.

"Elections are also coming up and during elections there is a spurt in sales but these are only temporary, so the real thing is that we need to see what happens after election and it would depend on what kind of government comes into power, whether it can bring reforms to spur growth" Bhargava said.

Car sales in India fell for a record ninth month in a row in July posting 7.4 per cent decline. During the April-July period of this year also, MSI's sales have fallen marginally at 2,71,063 units as compared to 2,73,076 units in the same period of 2012. "2011-12 was a very difficult year and 2012-13 has not turned out to be a better year, in fact it was more difficult in some more ways" Bhargava said.

Source: Link.

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Suzuki has planned to set up a wholly owned manufacturing plant in Gujarat after the Companies Act amendments are in place.

"We would now go ahead and decide the time table for the voting on the issue," said RC Bhargava, chairman of Maruti Suzuki.

"We have been waiting for the proposed changes in the Companies Act and would proceed accordingly to seek minority shareholders' approval,"

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