Maruti Suzuki India said it would be investing Rs 1,250 crore (Rs 12.50 billion) to double capacity at its K-series petrol engine unit in Gurgaon to 500,000 by 2012.
The K-series engine currently powers the Swift, A-Star, Ritz, Estilo and SX4 and the plan is to extend it to all the company's petrol models except the Maruti 800. Petrol engine cars account for nearly 60 per cent of the company's sales.
With this, Maruti's investments would have crossed Rs 12,000 crore (Rs 120 billion) over the past three years.
The money has been spent on a new car plant and diesel and petrol engine plants in Manesar, an upgrade of the Gurgaon plant, new model development and an R&D centre in Rohtak. The company's diesel engine plant has a capacity of 200,000 units.
Osamu Suzuki, chairman and CEO, Suzuki Motor Corporation, Maruti's 54 per cent shareholder, said the company will invest Yen 50 billion (Rs 2,500 crore) in R&D investment and K-series capacity expansion. Half this money will be spent on the engine plant.
Suzuki, who was in Delhi to attend the roll-out of the millionth car this financial year and lay the foundation stone for the second car plant, said the company would find it difficult to double production from one million to two million.
"At present, all world-class manufacturers are entering India and we are facing severe competition here. Today we achieved the one million-unit mark but to achieve two million production in a year will be a tough journey," he said. Maruti currently accounts for about half the car market's annual domestic sales of around 1.7 million units.
The country's largest car maker currently has an installed capacity of one million units between the two plants in Gurgaon and Manesar, both in Haryana, and it had announced plans last year to expand capacity by 0.25 million by 2012 (in Manesar) with an investment of Rs 1,700 crore (Rs 17 billion).
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