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Maruti says no plan B, investors nod certain

September 01, 2014, 10:24 AM IST by Selvin Jose
Maruti says no plan B, investors nod certain

The announcement of Suzuki Motor Corp building a solo plant in Gujarat created a furore among investors. Dark clouds still gloom over this development, but Maruti is certain that minority stakeholders will accept this development and there is no Plan B (if they don’t accept). 

Maruti Suzuki needs 3/4th of the minority stakeholders who hold a 44 per cent stake in the company to accept the proposal through a special resolution. 

"We are thinking of getting voting (done) in October. There is no plan B, I can't see why it should not happen," Maruti Suzuki India Chairman R C Bhargava told PTI in an interview.

There were apprehensions about Maruti turning into a trading channel of the Gujarat plant, to which Bhargava clarifies: "In all respects, the Gujarat plant will function as a Maruti plant. We control when the production lines are established, when we need more capacity, we will determine what needs to be produced and how much is to be produced.

Suzuki investing in Gujarat is also due to the significance of the Indian market to them. Maruti’s top management has been explaining this to shareholders since March, when the controversy of Suzuki sidelining Maruti began. 

The Gujarat plant will be commissioned by the second half of 2017. The new facility will take Maruti’s total available capacity double to three million from the current 1.5 million. 

Although, there is more than what meets the eye in this development. It will definitely benefit Suzuki Motor Corp in their global standings eventually. Also, the new plant will also help them launch more mass products due to the increased capacity. The prospects are good, but will shareholders fear of Maruti being reduced to just a supply channel in Suzuki’s Indian operations come true? There is nothing certain at this moment.a

Tags:Maruti Suzuki
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