Suzuki Plans Third Plant in India

Maruti Suzuki India Ltd. says it will open a third assembly plant in India in 2015. The 40 billion-rupee ($728 million) facility will have initial annual capacity to make 250,000 vehicles.

Construction of the new factory will begin early next year in Gujarat on the west coast of India. It's the company's first plant outside the northern state of Haryana, where violent riots last summer disrupted production, caused the death of a plant executive and injured more than 100 people.

Suzuki tells reporters in New Delhi that the new facility's coastal location will cut export costs, especially for vehicles bound for Europe. The company, which exports to about 125 countries, currently has capacity to build 1.5 million vehicles in India. It says the Gujarat facility could eventually be expanded to make 2 million units per year.

Suzuki's sales in India fell 11% to 1.1 million vehicles in the fiscal year ended March 31. The country's car market has expanded less than 2% since then, but Suzuki predicts its sales will grow 6% by the end of the current fiscal year.