I am not sure how would you react to this news, but it surely is a big deal that Maruti Suzuki is taking this huge decision to move its car assembly operations out of Gurgaon, Haryana plant and plans to move its operations to Mehsana in Gujarat. The Gurgaon facility will continue to produce engines and the car assembly lines will be converted to engine assembling and ancillary units. The Manesar plant will continue to assemble cars with more modernized robotic assembly lines, while the manual car assembly lines of Gurgaon will be shut down in phased manner. The Gurgaon plant will continue to make petrol engines which currently has a capacity to produce about 12 Lakh petrol engines per year. Apart from this, as reported recently, Maruti will develop Diesel Engine plant in Gurgaon facility itself with Rs. 1700 crore investment to produce up to 3 lakh diesel engines per annum by year 2014.
One of the major reasons cited behind moving car assembly operations out of Gurgaon is the increased congesting and bad traffic conditions of Gurgaon. When Maruti started its operations in year 1983 in India, Gurgaon used to be almost deserted and industrial area with almost no residential colonies in the vicinity, however a boom in the industrial activities, setting up of corporate offices and dense population and residential complexes which have come up in past one decade in Gurgaon has made Gurgaon far more congested and problematic for a huge production facility. Maruti has been facing troubles related to movement of traffic because of large car containers many a times choke roads and complaints from nearby resident welfare associations keep creating legal hassles for the industrial activities of Maruti in the region. These details have been revealed by Maruti Suzuki Chairman RC Bhargava to ET.
image – Maruti Swift Hatchback India
Gujarat and Manesar will both produce cars with assembly lines which will be highly automated with the help of robots to reduce dependency on manual labour and Gurgaon plant will serve as hub for manufacturing both petrol and diesel engines with a capacity of about 18 lakh units per annum with 12 lakh petrol and 6 lakh diesel engine units capacity including the Suzuki powertrain limited production figures.
Maruti will acquire about 500 acers of land in Gujarat in coming years and will develop assembly operations as well as develop vendors and ancillaries in the area to ensure smooth production. Being near to port, it will help Maruti to reduce its cost on exports of the cars from India, also it will also help Maruti balance its car deliveries to North and South parts of India in a much better way with one plant in Manesar in the Northern part while the other in south west in Gujarat.
It will bring additional investments to state of Gujarat and improve employment opportunities there. It may seem as the shifting from Gurgaon will cut jobs at Gurgaon, but since Maruti will not be shutting down the units, rather it will convert them to engine assembly points, it will keep most jobs intact and the human resources can be utilized on new operations without much of a trouble. It will surely hurt revenues and investments in Haryana in the coming time, but this is a part of the industrial re-location. Lets see how the things shape up as the finer detail and decision will be made in coming 6 weeks, which is by about end of May 2012.
via – ET
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