Maruti Suzuki to invest ₹7,410 crore to set up 3rd plant in Haryana’s Kharkhoda

Maruti Suzuki India Ltd’s board on Wednesday approved a ₹7,410-crore investment to set up the 3rd plant in Haryana’s Kharkhoda with a capacity of up to 2.5 lakh vehicles per year as the Japanese carmaker looks to tap growing domestic demand and exports.

The existing capacity at Kharkhoda stands at 2.5 lakh units per year. Another plant with a capacity of 2.5 lakh units per year is under construction.

The proposed capacity addition would be up to 2.5 lakh units per year. With this addition, the capacity at Kharkhoda is likely to reach 7.5 lakh units per year by 2029.

Kharkhoda plant is a greenfield project where the first plant started commercial operations last month. The Kharkhoda facility produces the compact SUV Brezza. Maruti Suzuki, including Suzuki Motor Gujarat Private Limited, the wholly owned subsidiary of Maruti Suzuki, has a total annual production capability of 2.6 million units.

Maruti Suzuki currently operates manufacturing facilities at four locations: three in Haryana (Gurgaon, Manesar and Kharkhoda) and one in Gujarat (Hansalpur). In anticipation of growing demand for automobiles in India and worldwide, the company plans to expand its annual production capacity to 4 million units. To achieve this, Maruti Suzuki is planning another greenfield facility with an annual capacity of 1 million units in Gujarat and is in the process of identifying a suitable location for this new facility.

While the carmaker took over 40 years to reach a capacity of two million units, it has set an ambitious target to ramp up volumes to four million by FY31. “The first two million took 40 years. But in the next six to seven years, we would like to increase our capacity to four million,” Hisashi Takeuchi, managing director and CEO of Maruti Suzuki, told Fortune India. “This is a big challenge for which we will try to accomplish,” Takeuchi said.

The Maruti Suzuki MD & CEO said the company expects big growth in exports to the African market because of "robust and price-competitive" products. “Our export market share is more than 40%. Our main customers are the Middle East, Africa and South America and some more destinations. In the African market, we expect big growth in the future. I am very confident that our products will become very popular in the African market,” said Takeuchi.

About 14% of Maruti Suzuki’s sales came from exports in the financial year 2023-24. Maruti Suzuki plans to export 3 lakh cars in FY25 and is targeting 20% sales from exports by FY31.

The Japanese carmaker’s India subsidiary last year announced a production milestone of 2 million vehicles in a calendar year for the first time in its history. This makes Maruti Suzuki the only OEM in India to achieve this significant milestone in passenger vehicle production. Of the 2 million vehicles, almost 60% were manufactured in Haryana and 40% in Gujarat. Baleno, Fronx, Ertiga, WagonR and Brezza were the top 5 manufactured vehicles during the calendar year 2024.