Maruti Suzuki plans to spend Rs. 3,000 crore in the existing quarter of this FY and is working on setting up its largest production plant in Sonipat
In the current fiscal, Maruti Suzuki India Limited (MSIL) has raised an annual capital expenditure of about Rs. 5,500 crore and is its highest ever ahead of a slew of product launches planned for this calendar year. The capex guidance is Rs 1,000 crore higher than the Rs 4,500 crore earlier guided capex at the start of FY2021-22.
Just in the existing quarter of this financial year, MSIL plans to spend Rs. 3,000 crore reportedly. The largest carmaker in the country has faced production setbacks due to the semiconductor issues and the economic slowdown created by the health crisis took its toll. Only a few months ago, MSIL launched the second generation Celerio – the brand’s first new launch in eighteen months.
It was quickly followed by the arrival of the CNG variant of the Celerio this month and a host of new products are waiting in the pipeline. Rahul Bharti, Executive Director, Corporate Affairs at Maruti Suzuki India Limited told Economic Times that the capex is “divided among the new models, R&D, maintenance capex, facilities in existing plants, land purchase, etc”.
MSIL is setting up a new plant in Sonipat, said to be the largest production plant, and part of the reason for raising a high capital expenditure could be related to that as payments to the state government in the land acquisition could be involved. The brand has also announced an investment of nearly Rs. 18,000 crore in the new facility and it will be commissioned by 2025.
It will have an installed capacity of one million units per annum. It must be noted that MSIL raised an average annual capital expenditure of Rs. 3,100 crore over the last twelve years. The company plans to achieve an annual production target of 1.9 million to 2 million units in 2022-23 and to regain the lost market it will strengthen its SUV portfolio.
In the next FY, Maruti Suzuki aims to launch half a dozen new vehicles as it will roll out new SUVs and crossovers in the Rs. 6 lakh to Rs. 20 lakh range including an all-new midsize SUV reportedly. Up next, the Baleno facelift is believed to launch next month ahead of new-gen Brezza in mid-2022, a midsize SUV around Diwali and an all-new Alto later this year.