Maruti Suzuki Plans to Expand Product Range to 28 Models

10 Oct 2023 , 11:29 AM

Maruti Suzuki plans to expand its product range from 17 models to 28 and increase production capacity to 40 lakh units per annum by 2030-31. The company anticipates a capital expenditure (capex) requirement of approximately Rs 1.25 lakh crore until 2030-31.

The ongoing capex in existing plants at Gurgaon, Manesar, and Gujarat will continue, with about Rs 7,500 crore spent in 2022-23. To create a 2 million unit capacity, Maruti Suzuki estimates a need for around Rs 45,000 crore, considering current costs and a small provision for cost escalation.

Strengthening infrastructure for exporting higher car volumes and enhancing production line flexibility will necessitate additional capex. R&D will require additional funding for developing 10-11 new models with various fuel options, including internal combustion engine (ICE) cars, EVs, and SUVs.

A payout of over Rs 12,500 crore for Suzuki Motor Corporation (SMC) shares in Suzuki Motor Gujarat (SMG) may impact profits, EPS, dividend payments, and cash availability.

Funds are required to expand sales, service, and spare parts infrastructure to support nearly doubling domestic sales volumes.

Maruti Suzuki’s board approved the issuance of shares to SMC for acquiring a 100% stake in SMG, making SMG a wholly-owned subsidiary of the company. The contract manufacturing agreement with SMG will be terminated as part of this acquisition.

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