In a recent regulatory filing, Maruti Suzuki, India's leading car manufacturer announced its ambitious plans for the future. The company revealed its intention to expand its current product range from 17 models to 28, a move set to require substantial investment. Maruti Suzuki plans to enhance its production capacity to 40 lakh units annually by 2030-31, a significant increase from its current capacity.

According to the filing, Maruti Suzuki anticipates a capital expenditure (capex) of approximately Rs 1.25 lakh crore until 2030-31 to realise these plans. The investment will focus on various aspects, including expanding production facilities in existing plants located in Gurgaon, Manesar, and Gujarat. In the fiscal year 2022-23 alone, the company allocated around Rs 7,500 crore for this purpose.

Additionally, Maruti Suzuki emphasised the need for further investments in research and development (R&D). These outlays will facilitate the development of 10-11 new models, encompassing different fuel options, as well as advancements related to Internal Combustion Engine (ICE) cars. The company also highlighted the necessity of significant capex for the production of electric vehicles (EVs) and SUVs, reflecting the growing demand in the market.

Furthermore, Maruti Suzuki stressed the importance of strengthening its infrastructure to support the anticipated increase in sales volumes. This includes creating robust sales, service, and spare parts networks to accommodate nearly double the domestic sales volumes. Investments will also be channelled into enhancing facilities for exporting a larger volume of cars, alongside making production lines more flexible, requiring additional capex.

The filing also mentioned the approval of shares issuance on a preferential basis to Suzuki Motor Corporation (SMC) for the acquisition of a 100% stake in Suzuki Motor Gujarat (SMG). This strategic move will result in SMG becoming a wholly-owned subsidiary of Maruti Suzuki, aligning with the company's broader corporate objectives.

In summary, Maruti Suzuki's comprehensive expansion strategy involves increasing its product range, production capacity, and infrastructure. The company's significant capex plans underscore its commitment to innovation, growth, and meeting the evolving demands of the automotive market.

Source: Mint