India’s largest car maker, Maruti Suzuki India Ltd, has started to look for a land parcel to set up a third manufacturing factory in Haryana, sources privy to the developments told CNBC-TV18.
The carmaker has its first facility spread over 300 acres in Gurgaon and a 600-acre Manesar factory in Haryana.
The company has already written to Haryana government demanding 1,200 acre plot in Sohna, Haryana as this land parcel is very close to the current Gurugram and Manesar plants of Maruti.
Currently, auto component makers supply parts to both the plants of Maruti from the same component manufacturing facility located at Gurugram.
If original equipment manufacturers and component manufacturers set shop in different location, Maruti might lose the cost effectiveness in the automobile market.
According to sources, Maruti has proposed to move the manufacturing plant from the current Gurgram location to the new facility once the new manufacturing factory gets functional.
Sources indicated that Gurugram plant falls right in the heart of the city and the company is having logistics problem given heavy traffic in the city. But the Haryana government is yet to take a call on the proposal of the company.
According to Haryana government policy, the state cannot allot land to industry, but can auction the plot.
However, Maruti is not willing to participate in the auction process and has asked the government to allot the land at a fair price.
Sources also indicated that the company chairman RC Bhargava has already met the Haryana chief minister and other state officials requesting the same.