India’s largest carmaker, Maruti Suzuki India Limited (MSIL), has approved a fresh capital outlay of ₹10,189 crore to scale up manufacturing capacity, signalling a strong demand outlook in both domestic and export markets. The company’s board has cleared the first phase of capacity addition at its upcoming facility in Gujarat, where it plans to manufacture up to 2.5 lakh vehicles annually by 2029.

Capacity expansion anchored in Gujarat growth strategy

The investment will go toward setting up a new car manufacturing plant at Khoraj Industrial Estate, along with shared infrastructure to support future expansion. The move builds on the company’s earlier decision to acquire land from the Gujarat Industrial Development Corporation, underscoring Gujarat’s growing prominence as an automotive manufacturing hub.

Maruti Suzuki currently operates with an installed capacity of around 24 lakh units per annum across facilities in Gurugram, Manesar, Kharkhoda and Hansalpur, with a peak capability of 26 lakh units. Notably, the company has indicated that its existing capacity is fully utilised—highlighting both sustained demand momentum and the urgency to expand production bandwidth.

The company has opted to fund the expansion through internal accruals, reflecting a strong balance sheet and healthy cash flows. This also suggests that Maruti Suzuki is maintaining financial discipline while investing aggressively in capacity creation.

Building on a multi-year capex cycle

This latest investment is part of a broader, multi-year capacity expansion strategy undertaken by Maruti Suzuki. Over the past few years, the company has steadily committed capital to augment production. In 2023, it outlined plans to invest roughly ₹45,000 crore over the decade to add close to 20 lakh units of annual capacity.

A key pillar of that roadmap has been the Kharkhoda facility in Haryana, where the first plant—designed with an initial capacity of 2.5 lakh units—has already begun taking shape, with a phased scale-up planned over the next few years.

Additionally, through its Gujarat operations (including the erstwhile Suzuki Motor Gujarat facility), the company has been expanding modular capacity blocks, typically in the range of 2.5–3 lakh units per plant, allowing it to align investments with demand cycles rather than front-load capacity.