ownership structure and environment (specific and general) for all assembly units
Most of the workforce here is relatively younger and more prone to
political influence. There have been recent events of unrest as well in the location during
2011-13 which has led to a loss of 1800 crores for the company’s stakeholders and
other factors such as depressed market during festive seasons contributing to the same.
Maruti is planning to increase the production capacity to 8 lakh units in the plant by
2013. They are looking for further investment plans which includes installation of 2.5 lakh
capacity assembly line in Manesar.
Gurgaon Plant :
By 2014-15 Maruti is planning to reduce the production capacity in this
plant to 5-6 lakh units from 8.5 lakh units. This is due to the increased congestion in
Gurgaon due to moving cars and trailer trucks. Moreover, Gurgaon is gradually
becoming a residential hub which is further leading to the company's decision of
reducing production there.
To compensate for the reduced production capacity in
Gurgaon, the company’s board has approved to buy land in Gujarat for future capacity
requirements. Project involves a total investment of 4500 crores which involves setting
up of 3 plants with capacity being 2.5 lakh units each. This move is due to the company's
strategy to increase Japanese investment in India as the Japanese don’t find China an
attractive option to spend anymore.
Diesel engine strategy of Maruti and reasons for related decisions
As per Maruti’s chairman Mr. RC Bhargava , Maruti’s decision to develop its own diesel
engines will depend on the Government's policy. They are currently using a 1.3 litre
diesel engine by Fiat. Maruti Suzuki is also planning to increase its diesel engine
production from 2.4 lakh units to 3 lakh units. They are also pushing its parent Japanese