In a major move to bolster its production capabilities, India's leading carmaker, Maruti Suzuki India, has announced a significant investment to expand its manufacturing footprint in Gujarat. The company's board has given the green light for a proposal worth ₹4,960 crore to acquire land and initiate capacity expansion plans.
Board Approves Land Acquisition for Massive Capacity Addition
The decision was taken during a board meeting held on Monday, January 12. The approval paves the way for the acquisition of land at the Khoraj Industrial Estate from the Gujarat Industrial Development Corporation (GIDC). The core objective of this move is a substantial increase in production capacity. The proposed expansion is targeted to add up to 1 million (10 lakh) units per annum to the company's overall output.
In its regulatory filing to the stock exchanges, Maruti Suzuki clarified that the ₹4,960 crore investment covers the cost of land acquisition, site development, and other preparatory activities. The final total investment for the entire capacity installation project will be determined and approved by the board in phases as the plans are fleshed out.
Financing and Current Capacity Utilization
The auto giant stated that the massive expenditure will be funded through a mix of internal accruals and external borrowings. This strategic investment comes at a time when the company's existing factories are operating at full throttle.
Maruti Suzuki's current total production capacity stands at approximately 24 lakh units per year. This capacity is spread across its manufacturing facilities in Gurugram, Manesar, Kharkhoda (all in Haryana), and Hansalpur in Gujarat. The company noted it has the capability to stretch this to 26 lakh units annually. This figure already includes the production from the erstwhile Suzuki Motor Gujarat Pvt Ltd, which has now been merged with Maruti Suzuki India.
The company explicitly confirmed that its existing capacity is fully utilized, underscoring the urgent need for this new expansion to meet future demand and growth targets.
Part of a Larger ₹35,000 Crore Gujarat Vision
This latest board approval is a concrete step towards fulfilling a larger investment commitment made earlier. In 2024, Toshihiro Suzuki, President of Suzuki Motor Corporation, announced that Maruti Suzuki India (MSI) would invest a staggering ₹35,000 crore to establish its second manufacturing plant in Gujarat. That announcement outlined a plan for a new facility with an installed production capacity of 10 lakh units per annum.
The newly approved land acquisition and preparatory work for the Khoraj Industrial Estate site appear to be the foundational phase of this ambitious ₹35,000 crore project. This expansion is critical for Maruti Suzuki to maintain its dominant market share in India's competitive passenger vehicle sector and to prepare for the future, including electric vehicle production.
The move also reinforces Gujarat's position as a major automotive manufacturing hub in the country, attracting continued investment from one of the industry's biggest players.
