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Maruti To Shift Car Production To Gujarat
The Gurgaon plant is being re-engineered to increase diesel engine production. Space for this is being created by reducing assembly lines of car production. Maruti Suzuki India chairman RS Bhargava had earlier said the company was expecting a drop in sales of its petrol cars and an increase in diesel car sales.
The Gurgaon plant builds mostly petrol cars like the M800, Omni and Alto. Most petrol cars apart from the Alto are expected to see a dip in sales this year. While demand for diesel cars such as the Swift, Swift DZire and Ritz have increased dramatically. These cars currently have waiting periods as long as six months.
Maruti Suzuki acquires its diesel engines from Suzuki Powertrains, a Suzuki subsidiary and Fiat. But with demand far exceeding current production, it needs to boost its diesel engine production on its own.
Maruti is also expecting a spike in demand for its diesel cars this year. There has been no fuel price hike since the elections in five states were announced. The central government is expected to hike petrol prices any day and this will immediately result in an increase in demand.
Reports say Maruti Suzuki will reduce car production at Gurgaon to five lakh units per year. The carmaker had produced as many as nine lakh cars in this plant in 2010. A company official has said even a drop in production of one lakh cars will help the company boost engine production by 2 to 3 lakhs.
The Gurgaon plant is located close to a residential area. The movement of parts and completed cars is becoming difficult due to traffic issues. This could also be the reason for Maruti Suzuki's decision to reduce production in Gurgaon.
Maruti will build a new car plant in Gujarat soon. This new plant as well as the plant in Manesar have complete automated assembly lines more suitable for building modern cars. A third production unit is also being built in Manesar.
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