Maruti Suzuki has announced that their proposed Rs 4000 crore project to set up a manufacturing plant in Gujarat will not be functional by FY2016. The Gujarat government had earlier allocated 700 acres to the company to establish a facility with an initial capacity of 2,50,000 units and was expected to be operational by the beginning of 2016.
Maruti Suzuki's chairman RC Bhargava has quoted that the economic slowdown and the resulting drop in sales as the primary reason that spurred this decision. Maruti has seen a constant drop in its numbers for the last four months with the company selling nearly 32,000 units lesser last month as compared to the figures in March. This slump has also forced Maruti to be innovative with their product line-up and has resulted in the introduction of the Stingray and the axing of the Estilo.
Maruti currently owns two facilities, one at Gurgaon and the other at Manesar, having installed capacities of 9,00,000 units and 5,50,000 units respectively per annum. Earlier Maruti had also announced further localisation for their components in a bid to keep costs under check. The falling rupee and increasing competition has also not aided the manufacturer in anyway, but the approaching festive season may help Maruti to regain at least a part of their lost numbers.