Country's largest car maker
Maruti Suzuki India on Saturday said it will invest Rs 4,000 crore, its biggest ever outside Haryana, to set up a new production facility in Gujarat by 2015-16.
Besides, components suppliers of the company are also likely to make an equal amount of investment to set up their respective plants at the location.
Maruti Suzuki India (MSI) said the new 700-acre plant near Mehsana will be set up in a phased manner with an initial investment of Rs 4,000 crore by 2015-16. The overall capacity in the first phase will be 2.5 lakh units.
FROM THE MAG: Why India has multiple auto hubs "In addition to Maruti Suzuki, the company's vendors and ancillary suppliers are expected to invest in Gujarat at matching levels," MSI said in a statement.
The Gujarat unit will be the company's 7th production plant and its biggest ever investment outside Haryana, where it has been based since its inception in 1983.
MSI's announcement to set up its facility in Gujarat is among the big investments announced in the recent past by auto firms, including Tata Motors' Nano plant at Sanand and Ford's second plant.
The plant in Gujarat will generate direct employment for over 2,000 people, MSI said.
"In addition, the ancillary units in the vicinity and supplier park will generate additional employment opportunities," the company said.
At present, MSI employs a total of 9,148 people as on March 31, 2012. .
The company has on Saturday "signed State Support Agreement (SSA) with the Government of Gujarat for purchase of land near Mehsana to set up an all new manufacturing facility", it said.
"This land purchase by the company is in line with long term management view on expansion of its manufacturing facilities in India to meet future market demand," MSI said.
Based on the market demand, the manufacturing facility near Mehsana will be added to the company's existing plants at Gurgaon and Manesar in Haryana, it added.
Last year, MSI had witnessed labour issues at its Manesar plant, but the company had vehemently denied that looking for a new location in Gujarat was not related to it.
When the Gujarat plant is commissioned, the total production capacity of the company will be 20 lakh units.
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How Narendra Modi turned around Gujarat's fortunes By 2015-15, the Gurgaon and Manesar facilities will have combined production capacities of 17.5 lakh units.
"Maruti Suzuki will continue to increase its production at Manesar facility, where a third assembly line, (Manesar C plant, 2.5 lakh units annually) is expected to go on stream by mid 2013-14," the company said.
MSI said the new plant near Mehsana will be used for exporting its cars from the Mundra port.
"The new facility is around 300 km from Mundra port and hence would be well suited for company's exports initiatives," it added.
In April this year, MSI Managing Executive Officer (Production) M M Singh had said that the second phase at the Gujarat plant would come up on 600 acres of land, to be purchased by the company.
Maruti Suzuki MD and CEO Shinzo Nakanishi, left, and Gujarat CM Narendra Modi at a press conference after signing a state support pact to set up new manufacturing facility near Mehsana in Gujarat on Saturday, June 2, 2012. <em>Photo: AP</em> 
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