Chennai: Maruti Suzuki India has made a decision to acquire Suzuki Motor Corp’s share in the Gujarat plant. The Suzuki Motor Gujarat (SMG) plant was established as a 100 per cent contract manufacturer for Maruti Suzuki India in 2014. However, with the changing dynamics of the automobile industry and the introduction of various powertrain technologies like electric vehicles (EV), hybrids, CNG, and ethanol, managing the production complexity with multiple powertrains under different managements has become challenging.
To address this, the Board of Directors of Maruti Suzuki India decided to bring all production-related activities under Maruti Suzuki India Ltd to improve efficiency in production and the supply chain. As a result, the contract manufacturing agreement between Maruti Suzuki India and SMG will be terminated.
Last fiscal year, SMG achieved a turnover of Rs. 31,852 crore, showing significant growth compared to Rs. 24,440 crore in FY22 and Rs. 15,850 crore in FY21.
The transaction of buying out Suzuki Motor Corp’s share in the Gujarat plant is expected to be completed before March 31, 2024. As per the contract manufacturing agreement, Maruti Suzuki India will buy SMG at the book value, which amounts to about Rs. 12,755 crore.
Maruti Suzuki India currently has a production capacity of approximately 2 million units, and it aims to increase it to 4 million units by 2030-31. The company is exploring various locations for this expansion.
