Maruti Suzuki To Acquire Suzuki Motor’s Gujarat Plant

Maruti Suzuki India has received board approval to acquire Suzuki Motor Gujarat (SMG) from its Japanese parent Suzuki Motor Corporation (SMC). This has been done to bring in production and supply chain efficiencies. Currently, SMG is a wholly-owned subsidiary of Suzuki Motor Corporation and recorded a turnover of Rs 31,853 crore for FY23. It was in 2014 that the Suzuki Motor set up a separate manufacturing facility in Gujarat, to boost the growing demand for its vehicles.

In October 2020, Suzuki Motor Group produced 1 million units making it the fastest production site in the world to achieve this feat. As part of the deal then, all automobiles produced in SMG were supplied to Maruti Suzuki and now accounts for 40% of the production volumes. The plant currently manufactures the Baleno, Swift, Dzire. It also produces the K12 petrol engine and the 5MT and AMT transmissions.

Given the big export potential that Maruti Suzuki now sees from India, and the growing domestic demand for vehicles, the company certainly wants to expand the capacities of its manufacturing facilities. Right now, though in terms of actual production, logistics, sales, and the costs thereof, there will be no change. The company said in a statement that “The cars earlier supplied by SMG as a contract manufacturer, will now continue to be supplied as before.”

The automaker stated in the release that “The Board of Directors considered this and decided that for efficiency in production and supply chain, it is best to bring all production-related activities under MSIL,”

The transaction is expected to be completed by the end of the current financial year.