Maruti plans one more capacity of 1 mn units

Along with it’s Q4 FY 23 results, Maruti has informed about the Board’s approval for additional 1 mn units capacity expansion.

  • The decision has been taken to capitalize on the anticipated growth in the domestic and overseas market.
  • This is in addition to the already under progress capacity expansion at Sonipat.
  • In Sonipat also, the plan is to ramp up capacity gradually to 1 mn units over period. 1st phase is of 2.5 lakh units to be completed by end 25.
  • Sonipat + the proposed new facility implies a total of 2 mn units planned capacity expansion by Maruti over period. This is similar to it’s current total capacity of 2.25 mn units across Gurgaon, Manesar and Gujarat.
  • No further details are currently disclosed by the Company on additional capacity expansion e.g., location, cost, time period etc. However, it expects to fund everything through internal accruals.

Some further key points mentioned by the management after Q4 results –

  • In FY 24, Maruti expects to grow faster than the expected industry growth of 6-8%.
  • Maruti will launch a 3 row, 7 seater SUV based on Toyota’s Innova Hycross under the suzuki brand in the next 3 months. This as such is in line with the contours of the tie-up between Suzuki and Toyota. However, what is interesting is Maruti’s entry into the luxury segment with an on road price of around Rs 35 lakh. Customer’s response to the same would be interesting to watch, especially when the same product would be available under Toyota brand as Hycross. Maruti has never ventured into this category before.
  • It says that outlook for small cars remain negative and the demand in this category may remain stagnant in FY 24. Traditionally, Maruti has dominated India because of it’s small cars. Times seem to be changing.
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