Ahmedabad: Maruti Suzuki India announced on Monday that its board has given the green light for the acquisition of Suzuki Motor Gujarat from its Japan-based parent company, Suzuki Motor Corporation.

In a press release, the company informed, “With the growth of the Indian car market and export potential, Maruti Suzuki India Ltd (MSIL) would need to increase its production capacity to about 4 million cars per annum by 2030-31, almost double from current levels. ”

The company statement further elaborated, “Managing this scale and complexity of production with multiple powertrains, under different managements, would pose several challenges. The Board of Directors considered this and decided that for the purpose of efficiency in production and supply chain, it is best to bring all production-related activities under MSIL. Accordingly, the Board approved termination of the contract manufacturing agreement and exercising the option to acquire the shares of Suzuki Motor Gujarat Pvt Ltd (SMG) from Suzuki Motor Corporation (SMC) subject to all legal and regulatory compliances including minority shareholders’ approval.”

The mode of acquisition, including the consideration to be paid to SMC, shall be decided in a subsequent Board meeting.

Currently, Suzuki Motor Corporation holds a 100 percent stake in Suzuki Motor Gujarat, which is responsible for supplying its entire production to Maruti Suzuki. The expected completion date for this transaction is March 31, 2024. DeshGujarat