India's largest carmaker, Maruti Suzuki, committed to setting up a second plant in Gujarat and expanding its EV production line in the state, as Indian states are competing to woo investments from global manufacturers.
According to Nikkei Asia, WSJ, and Autocar Professional, during the annual Vibrant Gujarat Summit, Maruti Suzuki said it would invest INR350 billion (US$4.22 billion) in Gujarat for a second vehicle manufacturing plant with an annual production capacity of one million units. The company will spend another INR32 billion to add a new EV production line to its existing factory in Gujarat.
The second plant is expected to begin production by fiscal year 2029 (April 2028 to March 2029), and the newly added EV production line is expected to be operational by fiscal 2027.
The company said that with the second plant in the state, its capacity in Gujarat will be two million units, adding that the company expected 1.7 times more vehicle production and 2.6 times more vehicle exports in fiscal 2024. The latest expansion announcement will help Maruti Suzuki boost its capacity in India from 2.25 million units to four million by fiscal 2023.
Besides Maruti Suzuki, Tata Group announced its intention to expand its EV presence in Gujarat and build a 20GW lithium-ion battery plant in the state. According to AAA Weekly, Gujarat was the third-largest state in India in automobile production after Maharashtra and Uttar Pradesh.
Maruti Suzuki's investment plan came as Japan-based manufacturers planned to increase their investment in India. According to a survey conducted by the Japan Bank for International Corporation (JBIC), as reported by NHK, Japan-based companies consider India the most attractive foreign investment destination for the second consecutive year. Approximately 48.6% of respondents expressed optimism about investing in India. Following closely behind were Vietnam at 30.1% and China at 28.4%. Notably, the figure for China marked the lowest recorded since the survey's inception in 1992.
