Shrugging off rumours that Suzuki was thinking of exiting the Indian market in light of the riots that took place at their Manesar plant last month, Maruti Suzuki has revealed that it is pondering an expansion of its diesel engine manufacturing capacity. This is in addition to an already announced plan to almost double the existing output.
In a market where the demand for diesel cars is increasing rapidly due to the increase in petrol prices over the last few months, Maruti is looking to exploit such a situation in an effort to stay ahead of its competitors.
[quote]At the company’s annual meeting of shareholders, Maruti Chariman R.C. Bhargava said “We should have a total capacity of 7,00,000 diesel engines by 2014. We are examining if this needs to be ramped up further.”[/quote]
Currently, Maruti has an annual production capacity of 3,00,000 diesel engines. Besides this output, it purchases another 1,00,000 from Fiat S.p.A.
It is believed that the cost of this expansion would be around Rs.1,700 crore and that the plant is likely to start production by mid-2013. The new plant is estimated to produce 1,50,000 diesel engines in 2013 and 3,00,000 diesel engines in 2014.