Automobile News

Maruti Suzuki lines up Rs 4,000 cr capex for next fiscal

Maruti Suzuki lines up Rs 4,000 cr capex for next fiscal

NEW DELHI: The country’s largest carmaker Maruti Suzuki India (MSI) will invest Rs 4,000 crore in the next fiscal on capital expenditure, including development of new products, the company’s Managing Director Kenichi Ayukawa said today.

The company is also targeting yet another year of double-digit growth in the next financial year, similar to what it expects in the ongoing fiscal, he said.

“It will be Rs 4,000 crore,” Ayukawa told PTI when asked about the company’s capex for 2018-19.

Elaborating on the company’s planned investments during the next fiscal, he said: “It will be utilised for new product development, engineering, maintenance of plants and network development.”

The company is expected to launch four new products, including the upcoming new Swift, in the next 12-18 months.

Commenting on the company’s network expansion programme, he said the target is to reach 5,000 sales and service outlets by 2020.

“These will be under both the Arena and Nexa chains,” Ayukawa added.

At present, the company has 2,098 traditional outlets which are in the process of being converted to its new retail channel Arena, 289 outlets of premium chain Nexa and 162 for its commercial vehicles.

On an average, the company adds at least 200 new sales outlets every year to enhance its reach and penetration. MSI’s network has grown from about 1,200 outlets in FY12-13.

When asked about the company’s growth expectations in the new fiscal, Ayukawa said the company is expecting 2018 to be better than 2017.

“I believe the market is growing more than in 2017 so we will try to keep our growth at the same level of the market at least (in the next fiscal),” Ayukawa said.

In the April-December period this fiscal, MSI’s domestic sales grew by 15.5 per cent at 12,26,418 units as against 10,61,873 units in the year-ago period.

Ayukawa said in 2019, Suzuki’s Gujarat plant will reach total production capacity of around 5 lakh units from its two lines there, that will help ease pressure on Maruti Suzuki to meet market demand.

“At the beginning of 2019 second unit at Gujarat plant will start and maybe in six months it will have full production of 2.5 lakh units,” he said.

In 2018-19, the company is expecting 2.5 lakh units from the Gujarat plant.

He said even at the company’s existing plants at Gurgaon and Manesar in Haryana, MSI has been able to improve volumes by around 5 per cent through productivity enhancement.

The two plants in Haryana produce around 1.5 million cars annually.

“I think we will try to find further room for improvement there,” Ayukawa said.

With production of the new Swift to be totally shifted to Gujarat, he said the company will have more room for Baleno production at Manesar.

“Swift is the only model at present which we will be producing only at Gujarat,” he added.

PTI