Maruti Suzuki plans to invest 1.25 lakh crore between 2030 and 31 to increase manufacturing

 Maruti Suzuki plans to invest 1.25 lakh crore between 2030 and 31 to increase manufacturing

The biggest automaker in India, Maruti Suzuki, said in a regulatory filing on Monday that it planned to increase its product line from 17 to 28 models and increase its manufacturing capacity, which would need capex of around 1.25 lakh crore through 2030–31.

By 2030–2031, the carmaker claimed, it intends to increase its overall manufacturing capacity to 40 lakh vehicles annually.

"The usual capex in the Manesar, Gujarat, and Gurgaon factories will continue. Around 7,500 crore was spent in 2022–2023. Up to 1.25 lakh crore might be spent on capital expenditures through 2030–31, according to Maruti Suzuki India's regulatory filing.

The carmaker said that the assessment is based on existing expenses and a tiny amount for cost escalation and that the firm would require roughly Rs. 45,000 crores to have a capacity of 2 million units.

"The infrastructure will need to be upgraded in order to export the much more automobiles. Additional capital expenditures will be required for the flexible reconfiguration of manufacturing lines.

"R&D will need more expenditures in order for MSIL to be able to complete the majority of the development work for ICE automobiles. During this time, Capex will be required to produce 10 to 11 new models with various fuel choices. Larger capex would also be required for the production of EVs and SUVs, the automaker said.

"Payout of over ₹12,500 crore to feed Suzuki Motor Corporation (SMC) shares in Smm would, besides reducing profits, EPS and payment of dividends, could also create a shortage of cash," according to the MSI.

To virtually treble domestic sales volumes, funds would be required for building the sales, service, and spare parts infrastructure. Additionally, the infrastructure for exporting the much more automobiles will need to be improved. More capital expenditures will be required for the flexible reconfiguration of manufacturing lines.

The MSI board authorized the issuance of shares to SMC on a preferential basis in August of this year as payment for the latter's purchase of a 100% ownership in SMG. Suzuki Motor Gujarat (SMG), upon the purchase, will become a wholly-owned subsidiary of the business.

The removal of the contract manufacturing agreement with SMG and the acquisition of SMC stock were both authorized by the MSI board at its meeting on July 31, 2023.