Maruti planning to set up Rs.1700 crore diesel plant in Gurgaon

Last weekend, the Board of Directors of Maruti Suzuki India, had a meeting to discuss some important issues post which a media announcement was made stating that the company has plans to make a total investment of Rs. 2,600 crore by 2015 to design and develop the new diesel plant at its current Gurgaon facility with an expansion of its Research and Development activities at Rohtak. In the beginning, the company was planning to spend Rs. 1700 crore on the setup of its new diesel plant at Gurgaon, but later on an additional Rs 900 crore was sanctioned for the R&D setup at Rohtak to improve the emission and safety of the vehicles by testing them at that facility. It is also to be noted here that the ownership of the new diesel plant will be completely held by the firm itself.

Maruti planning to set up Rs.1700 crore diesel plant in Gurgaon

The fabrication of the new diesel plant will materialize in phases, which is expected to commence by the middle of the year 2013. The initial volume of this plant is to be somewhere around 1.5 lakh units per annum. In the first phase, the company would be putting in Rs.950 crore. After which they will double the volume to 3 lakh units every year as per their plans. The targeted production of 3 lakh units should be achieved by the year end of 2014, where total investment would be up to Rs 1,700 crore.  The company had put the announcement on hold for the investments as it was waiting to see what the government decides regarding the much speculated diesel cess. Currently Maruti Suzuki India is sourcing its diesel engines from Fiat India and SPIL (Suzuki Powertrain India Ltd). Till the firm’s plant becomes fully functional, the firm will receive 3 lakh diesel units in place of 2.4 lakh from SPIL and 1 lakh from Fiat India to meet the increasing demand for its diesel vehicles and so, its requirement for diesel engines will be fully met.

All of this has happened because the sales of diesel cars have risen by 1,50,000 units in 2012-2013 whereas the petrol car sales have dropped by 50,000 units. According to the Chairman, Maruti Suzuki, RC Bhargava, “the demand of diesel has emerged drastically out of the rise of the petrol prices in the current times, thus a need for diesel engine based cars for they are economic in the long run.” Moreover, because of the government’s subsidies on diesel, they are overall cheaper than the petrol vehicles. Now these days 40 per cent of new purchases in the Indian automobile market consists of diesel cars, which was less than 20 per cent compared to the previous a couple of years. Right now, one has to wait for at least six months to receive the delivery of Maruti Suzuki’s Swift hatchback’s diesel version.

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