Maruti buys Suzuki Motor Gujarat
The purchase of Suzuki Motor Gujarat by Maruti. According to MSIL, in order to satisfy future demand, they will need to increase its annual production capacity to approximately 4 million vehicles (40 lakhs) by the year 2030-31
NEW DELHI: Maruti Suzuki (MSIL), the biggest automaker in the nation, is ending the contract manufacturing agreement (CMA) and exercising the option to purchase Suzuki Motor Gujarat (SMG) shares from its parent firm Suzuki Motor Corporation (SMC). By March 31st, 2024, MSIL hopes to get the transaction finished.
According to MSIL, in order to fulfil future demand, they must increase their production capacity to roughly 4 million (40 lakh) automobiles year by 2030–2031. This would occur over a number of sites, and for a fair amount of time, different powertrain technologies like EVs, hybrids, CNG, and ethanol will coexist.
It would be difficult to manage a production of this size and complexity with various powertrains under different managements. The Board of Directors thought about it and decided that it would be desirable to bring all production-related activities under MSIL in order to improve supply chain and production efficiency,” MSIL stated in a regulatory filing.
Minority shareholders opposed the MSIL Board’s decision to establish a contract manufacturing arrangement with SMC in 2014 since the Gujarat factory was meant to be under SMC, not MSIL. In a press conference, R. C. Bhargava, Chairman of MSIL, stated that the decision was made because the market environment has changed since 2014, when the structure for developing SMG was established. He said that it has not yet been decided how or in what format shares will be bought. A MSIL board meeting is anticipated within the next week.
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