India’s largest car maker Maruti Suzuki India on Tuesday said it, along with vendors, could invest up to Rs. 18,000 crore in Gujarat as it looks to produce around 20 lakh units in the long run in the state.

The company’s top executives, including Chairman R C Bhargava and Managing Director Shinzo Nakanishi, met Chief Minister Narendra Modi on Tuesday to expedite setting up of its manufacturing foothold in the state.

MSI is looking at a phased manner of starting car production in the state. “First phase of production would be of capacity of one million cars, which would take approximately five years to install. At current cost, that would entail an investment of Rs. 6,000 crore,” Bhargava said.

In the second phase, he said if the market continues to grow and there is scope for further expansion, “We would do another million cars with corresponding investments. Along with that, we would get all the vendors, suppliers to the state and their investments would also be of the order of about Rs. 6,000 odd crore,” Bhargava added.

He, however, added that the company has not finalised plans yet to set up its manufacturing base in the state. “We came to explore the possibilities of coming in the future to Gujarat.

The attitude of the Chief Minister and the Government of Gujarat has been positive and for that reason, Gujarat certainly is a strong probability for our future selection for expansion,” he said.

Official sources, however, had said MSI has zeroed in on a location near Sanand out of three offerings — Sanand, Halol and Dholera.
Bhargava said another main reason for exploring Gujarat as an option is due to close proximity to the Mundra port that will help save logistics cost while exporting. If MSI decides to set up shop in Gujarat, then the unit will be the company’s 7th production plant and its biggest ever investment outside Haryana.