Group 16 (4).docx - 1 ownership structure and...

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1. ownership structure and environment (specific and general) for all assembly units Associated implications Manesar Plant: 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. Hansalpur,Gujarat Plant: 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. 2. 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

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