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Business News/ Companies / News/  Maruti Suzuki eyes 1.25 lakh crore capex till 2030-31 to expand production capacity
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Maruti Suzuki eyes ₹1.25 lakh crore capex till 2030-31 to expand production capacity

Maruti Suzuki, India’s largest carmaker, in a regulatory filing on Monday said the company planning to enhance product range to 28 models from 17 currently and expand the production capacity hence it could need a capex of around ₹1.25 lakh crore till 2030-31

Maruti suzuki said the company will need about Rs.45,000 crores to create a capacity of 2 million units, adding that the calculation is based on current costs and a small amount for cost escalation (Photo: Mint)Premium
Maruti suzuki said the company will need about Rs.45,000 crores to create a capacity of 2 million units, adding that the calculation is based on current costs and a small amount for cost escalation (Photo: Mint)

Maruti Suzuki, India’s largest carmaker, in a regulatory filing on Monday said the company planning to enhance product range to 28 models from 17 currently and expand the production capacity hence it could need a capex of around 1.25 lakh crore till 2030-31.

The automaker said it is planning to expand its total production capacity to 40 lakh units per annum by 2030-31.

"The regular capex in the existing plants at Gurgaon, Manesar and Gujarat will continue. The amount in 2022-23 was around 7,500 crore. Total capex till 2030-31 could be as much as 1.25 lakh crore," Maruti Suzuki India said in the in regulatory filing.

The automaker said the company will need about Rs.45,000 crores to create a capacity of 2 million units, adding that the calculation is based on current costs and a small amount for cost escalation.

"The infrastructure for exporting the much larger volume of cars will also have to be strengthened. The conversion of production lines to have greater flexibility will need additional capex."

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“R&D will need additional outlays to enable most of development work relating to Internal Combustion Engine (ICE) cars being done by MSIL. Capex will be needed to develop 10-11 new models, with different fuel options in this period. Production of EVs and SUVs will also need larger capex", the auto maker added.

"Payout of over 12,500 crore for Suzuki Motor Corporation (SMC) shares in SMG would, besides reducing profits, EPS and dividend payments, could also create a shortage of cash," the MSI said.

Funds would be needed for creating the sales, service and spare parts infrastructure to almost double domestic sale volumes. The infrastructure for exporting the much larger volume of cars will also have to be strengthened. The conversion of production lines to have greater flexibility will need additional capex.

In August this year, the MSI board approved the issue of shares on a preferential basis to SMC as consideration for the acquisition of 100% stake in SMG. Post such acquisition,  Suzuki Motor Gujarat (SMG) will become a wholly-owned subsidiary of the company.

The MSI board, in its meeting held on July 31, 2023 had approved termination of the contract manufacturing agreement with SMG and acquiring shares of SMC.

 

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Published: 09 Oct 2023, 05:14 PM IST
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