Maruti Suzuki India has approved an investment of Rs 101.89 billion (bn) to develop the first phase of a manufacturing facility at Khoraj Industrial Estate in Gujarat. The board cleared the project, which will be the company’s fifth plant, and the first phase is expected to add 0.25 million (mn) units of annual capacity by 2029 subject to market conditions. The phase will be funded through internal accruals and will include car manufacturing lines and common infrastructure. The company said the move is intended to ease full utilisation of its current capacity.

The investment will cover plant construction, equipment and utilities. Earlier the board approved land acquisition from the Gujarat Industrial Development Corporation for Rs 49.6 bn. Maruti Suzuki’s production base includes facilities at Gurugram, Manesar and Kharkhoda in Haryana and Hansalpur in Gujarat. Installed capacity stands at about two point four mn units per annum, with capability to produce up to two point six mn units including output from the erstwhile Suzuki Motor Gujarat.

The company said existing capacity is fully utilised, underscoring the need for fresh investment to sustain growth and meet export demand. The Khoraj facility forms part of a broader expansion strategy that ties in with parent Suzuki Motor Corporation’s longer term plans, which include an earlier commitment to invest Rs 350 bn to set up a second Gujarat facility with one mn units of capacity. The phased approach is intended to align capacity additions with market conditions while retaining timeline flexibility.

The additional capacity is expected to support domestic and international markets and to aid the company’s target of regaining fifty per cent passenger vehicle market share by FY2030. In calendar year 2025 the company produced more than 1.84 mn vehicles and cumulative capacity from ongoing and planned projects is expected to reach 4.35 mn units, exceeding the stated target of four mn by 2031. Parent Suzuki Motor Corporation has also committed capital expenditure of 1,200 billion yen and around Rs 700 bn for capacity expansion and related initiatives.