Maruti Suzuki’s long-standing Gurgaon plant might soon be history, as reports from Reuters indicate that the current location just outside the NCR Metropolis is too congested for manufacturing on this scale. The report indicates that a top Maruti Executive has confirmed the plans, saying that it would take at least 4-5 years before the new facility becomes operational. Sources at Suzuki who are currently manufacturing out of a plant in Gujarat said that they have no comments to offer on the shift.
Maruti’s plant in Gurgaon has always been an integral part of the Indian Automotive industry. It is this same plant that rolled out the first Maruti 800 as far back as in 1983. Since then, Maruti Suzuki has become the nation's largest automaker and is responsible for the sale of almost one in every two passenger cars sold in the country. In fact, many people are of the opinion, that their success is testament to India’s inexpensive manufacturing capabilities and has since inspired a number of companies to set up base in the country. One can even argue that this plant has a key role in making India one of the largest production bases for passenger vehicles and components in the world.
Now to move a factory of this size along with the component vendors who have also set up shop in the vicinity would be a gargantuan task. The company has asked the Haryana government to allocate 1,200-1,400 acres for the new facility just 25 odd kms outside Gurgaon in Sohna. This goes against the state policy of auctioning land as opposed to direct allocation, and the state authorities are yet to confirm Maruti’s Request.
Interestingly, it would seem that Maruti themselves would be acquiring this facility, as opposed to the case the Gujarat manufacturing facility which is owned by their parent Suzuki. This move should also help increase their manufacturing capacity considering that the current facility is running full with almost 7 lakh vehicles leaving the facility every year.
If the shift happens, this would mean shorter waiting periods for customers and this, in turn, will help the company increase its bookings to sale conversion ratio, resulting in higher sales.