that all three partners (SMG, SMC and Maruti) are expected to work together in a way that derives common benefits, while adding that SMC has no plans to increase stake in Maruti Suzuki. “Maruti has reached 1 million annual sales and has to double its network now. In my experience, volumes are manageable till this point after which you need a new company. Instead of SMC officials helping in expansion, I believe our Indian managers can do it best,” he said.
Headquartered at Ahmedabad, SMG will be set up by April this year with a starting share capital of Rs 100 crore. It will be headed by N Aizawa, a senior Suzuki executive who will be deputed from Japan, while other senior managers will likely be deputed from Maruti Suzuki itself.
Production at Gujarat is expected to start by end-2016, where SMG will initially invest Rs 3,000 crore for a 2.5 lakh unit per annum production line, though at start the output will be 1 lakh cars a year. In total, the two facilities in Gujarat – 640 acres in Becharaji and 550 acres in Vithalpur, can accommodate seven production lines producing almost 18 lakh cars a year. Till date, Maruti has already invested Rs 250 crore in purchasing the two plots of land, which will now be leased to SMG on an arms' length basis.