New Delhi: India’s leading car maker, Japan-owned Maruti Suzuki, said Tuesday it would invest ¥35 billion ($416 million) to build a new factory to meet growing local demand.

“We had not estimated the pace at which car demand would grow (in India),” the chairman of Suzuki Motor Corp, Osamu Suzuki, said in a speech to Maruti Suzuki shareholders.

Maruti, which has a strong following among India’s growing middle class, is already producing at full capacity and has long waiting lists for some popular models.

The new factory will be the third unit at Maruti’s complex in Manesar, northern Haryana state, which is about 30 kilometres (18 miles) from New Delhi. The plant will lift the company’s total production to 1.75 million units a year.

India has posted blistering car sales growth, with more than half a million sold in the first four months of the current fiscal year.

Car sales in India hit a record high in July on the back of soaring demand in rural areas, jumping 38 percent to 158,764, compared with 115,084 in the same month last year, according to industry figures.