New Delhi: India's largest passenger carmaker Maruti Suzuki India Ltd Saturday said it will invest Rs 40 billion to establish a new production unit in the Mehsana district of Gujarat state by 2015-16.
The company has "signed State Support Agreement (SSA) with the Government of Gujarat for purchase of land near Mehsana to set up an all new manufacturing facility", Maruti Suzuki said in a statement.
Under the pact, the state government has allocated 700 acres of land to Maruti Suzuki for the plant, which will be developed in a phased manner with a total production capacity of 250,000 units during the first phase, the statement added.
"This land purchase by the company is in line with long term management view on expansion of its manufacturing facilities in India to meet future market demand," the statement said.
The proposed plant will take the company's combined manufacturing capacity to 2 million units by 2015-16, it added.
The Mehsana plant, the carmaker's first facility outside Haryana state, will be the seventh production unit of the automaker.
Maruti Suzuki India's Chairman R C Bhargava had earlier said that Gujarat is a positive place for doing work and it was only a matter of time before the company needed to look at building a plant in regions other than those at Gurgaon and Manesar in Haryana state, because of the increasing demand for cars.
The automaker has developed infrastructure at the Mundra port in Gujarat, and uses it for almost all of its exports.
The Indian auto giant currently produces 900,000 units per year at its Gurgaon facility, which houses three fully integrated plants. It makes 550,000 vehicles per year at Manesar, which has two fully integrated units and the third assembly line is in advanced stage of completion and may complete this year.