Maruti to take reins of contract mfg firm

Carmaker to buy Suzuki Motor Gujarat from parent at book value

- Alisha Sachdev

Maruti Suzuki India Ltd (MSIL) on Monday said it has decided to buy out its contract manufacturing partner Suzuki Motor Gujarat (SMG) from parent Suzuki Motor Corp. (SMC) at a potential book value of ₹12,755 crore.

India’s largest carmaker aims to complete the transaction by 31 March 2024, R.C. Bhargava, the chairman of Maruti Suzuki, said. SMG, with 3,200 workers, has an annual capacity of 750,000 units, a fourth of MSIL’s 2.25 million capacity. The transaction is subject to regulatory clearances.

“In 2014, we had made a unique proposal to our shareholders that our Gujarat manufacturing facility will be set up by Suzuki Japan, and they’d set up a 100% owned subsidiary to make cars for MSIL," Bhargava said. “The contract manufacturing agreement was signed in 2015 and has worked well for the last eight years. But since then, the overall situation in the car industry and the country has changed substantially."