Maruti to buy Gujarat plant from Japanese parent for £1.28 bn

For a total acquisition value of £1.28 billion, Suzuki Motor Gujarat Private Limited (SMG), owned by parent Suzuki Motor Corporation, would be acquired by Maruti Suzuki (MSIL), the largest automobile manufacturer in India. Within the first quarter of 2024, the carmaker stated in a regulatory statement that the transaction is anticipated to close.
One of the biggest automobile manufacturing facilities in India is run by SMG in Gujarat, and it supplies Maruti Suzuki with completed vehicles on a no-profit, no-loss basis.
The purchase of the 100% subsidiary of the Japanese parent company, Maruti Suzuki, which is also mostly controlled by Suzuki Motor Corporation, is expected to streamline local operations.
"With the growth of the Indian car market and export potential, the company would need to increase its production capacity to about 4 million cars per annum by 2030-31, almost double from current levels. This would happen over several locations, some of which are known and some being studied.
"On the other hand, given the carbon neutrality requirements, several power train technologies like EVs, Hybrids, CNG, Ethanol etc. will co-exist for a reasonably long period of time. Managing this scale and complexity of production with multiple power trains, under different managements, would pose several challenges.
"The Board considered this and decided that for the purpose of efficiency in production and supply chain, it is best to bring all production related activities under the company," the Indian company said.