The battle is over. Maruti Udyog, the country’s largest carmaker has announced a Rs 6,000 crore mega-investment with its parent Suzuki, under which a new car plant will be set up through a joint venture, where Maruti will hold a 70% stake. The understanding regarding this was reached at a meeting of the Suzuki representative with the Steel secretary and Jagadish Khattar, Maruti MD.

After a Maruti board meet in New Delhi on Thursday, Khattar said MUL’s another Suzuki JV called Suzuki Metal India would produce diesel engines.

MUL has 49% stake in Suzuki Metal. Maruti currently imports diesel engines from Peugeot in France. Once engines start coming from the new Indian plant, this dependence will end.

"A new JV called Suzuki Maruti India will be floated for a new car plant, where 70% equity will be owned by Maruti and the rest with Suzuki," Maruti Udyog chairman Shinzo Nakanishi said. The investment, to be made in the next 4-5 years, would be for the new car plant, diesel facility and R&D, he said.

The new diesel engine manufacturing plant will be set up by Suzuki Metal India, a 49:51 joint venture of Suzuki and Maruti.

The exact stakeholding of the new company is yet unclear. In the new company Suzuki Maruti India, Maruti will have 70% stake and Suzuki 30%. But since Maruti itself is 54% owned by Suzuki, the actual Suzuki stake in the new company is expected to be much higher.

"We have decided the new diesel engine plant will cater to Suzuki’s operations in Europe, Asia and even Japan. Resultantly, the capacity of the plant is now likely to be 300,000 units with an investment of about Rs 1,000 crore," Khattar said.

Asked about the exact quantum of investment, Khattar said after the preparation of a detailed project report, modalities of financing would be considered.

OUR AUTOMOBILES EDITOR