Ahmedabad, India – Indian automaker Maruti Suzuki India Ltd (MRTI.NS) announced plans to invest 350 billion rupees ($3.9 billion) in a new manufacturing plant in the western state of Gujarat, as the company seeks to meet growing domestic demand and boost exports. The Gujarat government confirmed the investment in a statement on Saturday.
The new plant is expected to add production capacity of up to 1 million vehicles per year, complementing Maruti Suzuki’s existing annual capacity of 2.4 million vehicles. The project highlights the company’s efforts to maintain its leadership position in India, the world’s third-largest car market, and capitalize on increasing demand for passenger vehicles.
Production Timeline and Capacity Expansion
Maruti Suzuki plans to begin production at the Gujarat facility in financial year 2029. The plant is intended to help the automaker:
- Expand manufacturing capabilities for domestic and export markets
- Reduce delivery backlogs for popular models
- Strengthen its competitive edge in India’s growing automotive sector
Partho Banerjee, the company’s marketing and sales head, noted that Maruti Suzuki currently faces an order backlog of approximately one and a half months for its entry-level vehicles, reflecting robust demand. In December, the company reported domestic sales of 178,646 units, a record 37% increase compared with the previous year.
Initial Investment and Land Acquisition
Maruti Suzuki’s board of directors recently approved an initial investment of 49.6 billion rupees to acquire land for the new Gujarat plant. This first phase of the project will enable the company to secure a suitable site and begin construction.
The plant represents a major capital expenditure for Maruti Suzuki and aligns with broader industry trends in India, where automakers are investing heavily to expand production and meet rising consumer demand for vehicles and exports.
Maruti Suzuki’s Market Position
Maruti Suzuki, majority-owned by Japan’s Suzuki Motor Corporation (7269.T), has long been India’s top-selling carmaker. The automaker dominates the country’s passenger vehicle market and continues to introduce new models to maintain growth.
The new plant in Gujarat is part of Maruti Suzuki’s long-term strategy to address production constraints, scale operations, and leverage the state’s industrial ecosystem, including access to skilled labor, logistics networks, and supportive state policies.
Strategic Implications for India’s Automotive Industry
The investment underscores India’s status as a global automotive manufacturing hub. Analysts highlight that Maruti Suzuki’s expansion will:
- Create thousands of direct and indirect jobs in Gujarat
- Support ancillary industries, including auto components and logistics
- Strengthen India’s position in the global passenger vehicle export market
The company’s move also reflects increasing foreign investment in India’s automotive sector, with global carmakers seeking to capitalize on the country’s expanding middle-class population and rising vehicle demand.
Key Metrics – Maruti Suzuki New Plant
| Metric | Details |
|---|---|
| Investment | 350 billion rupees ($3.9B) |
| Location | Gujarat, India |
| Expected Production Start | FY 2029 |
| Additional Capacity | 1 million vehicles per year |
| Current Total Capacity | 2.4 million vehicles per year |
| December 2025 Domestic Sales | 178,646 units (+37% YoY) |
| Initial Land Investment | 49.6 billion rupees |
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