Moving On

Congestion propels Maruti to relocate from its historic Gurugram plant

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Maruti Suzuki’s Gurugram facility will, in a period of four to five years, be relocated to Sohna (also called Greater/South Gurugram) since it is finding it difficult to operate at the present site. Relocation has been overdue for the carmaker, which has been struggling with timely movement of finished models and raw materials due to the congestion levels in the city.

Its planned move might not be as easy as it sounds. Maruti’s departure from Gurugram will displace auto ancillaries that have thrived around it. Suffice to say that Maruti is the epicentre of the city’s growth and transformation over the decades. The city traces back its development back to 1983 when the then Maruti Udyog, the joint venture of the Indian government and Japan’s Suzuki Motor Corp, set up base on the outskirts of Delhi. Following its footsteps, other companies such as DLF (which itself played a transformational role), General Electric, followed by Fortune 500 companies also made their way to the satellite city. Large scope of employment attracted expats from all over and gave rise to the posh residential complexes all over the city today.

Cut to the past three years, mushrooming residential complexes have sounded the death knell for many factories in the area. The Haryana government had, in August 2016, post complaints from residents, conducted a survey of factories located in residential areas – roughly 2,000 in number – to sketch the relocation of the polluting units. The number of complaints, since then, has only increased and it has come to such a point that in January this year, the Pollution Control Department declared the launch of a helpline solely to address pollution-related complaints.

Moving the manufacturing facility 25 km south of Gurugram not only takes it away from residential areas but will also help the company to cash in on Gurugram’s exorbitant real estate prices. The current factory manufactures 600,000-700,000 units in a year. The new plant could fit into Suzuki’s expansion plans of producing 2.5 million units annually by 2030 to raise its already unbeatable 50% market share. Unlike the Rs.90-billion investment undertaken by Suzuki for its upcoming Sanand plant in Gujarat, this time round it's Maruti, and not its parent, who is all set to invest Rs.100 billion-150 billion to house three to four assembly lines. Hence, it has asked for 1,200-1,400 acres of land to be directly allotted instead of through an auction. What remains to be seen is if the Haryana government, which usually auctions land, makes an exception for the company.