Maruti Suzuki to invest Rs 4,960 crore in Gujarat land for capacity expansion

Maruti Suzuki on Monday said its board has approved an investment of Rs 4,960 crore to acquire land in Gujarat as part of a plan to expand vehicle production capacity, according to a regulatory filing.

The country’s largest carmaker said the land will be acquired at the Khoraj Industrial Estate from the Gujarat Industrial Development Corporation, and will support a proposed capacity addition of up to one million vehicles a year. The timelines and total capital expenditure for the expansion will be finalised later as the company rolls out the project in phases.

The approval comes as Maruti Suzuki’s factories are already running at full stretch. The company currently has an installed capacity of about 24 lakh units a year across its plants in Gurugram, Manesar, Kharkhoda and Hansalpur, with a production capability of 26 lakh units, all of which is fully utilised.


Maruti Suzuki shares were down 0.7% at Rs 16381.80 as of 10:24 AM.

The move signals the automaker's intent to lock in manufacturing headroom early, at a time when demand is firm and supply constraints can quickly translate into lost market share.

The company said the expansion is driven by growth in market demand, including exports. Funding for the land acquisition, development and preparatory work will come through a combination of internal accruals and external borrowings.

Maruti has built a substantial manufacturing base in Gujarat over recent years, leveraging the state for both domestic production and exports. The additional land provides headroom for future capacity expansion as Maruti Suzuki’s existing plants run at full capacity.