Maruti Suzuki, India’s largest carmaker is on a verge to shut down its Manesar plant in Haryana. The carmaker is expected to face a heavy payment of additional compensation worth over Rs. 500 crores for the 600 acres of land where the plant sits. It can be a big menace for the automaker, as the top selling cars like Swift hatchback and Swift DZire are being made at Manesar. The Manesar plant is also a sole base for making diesel engines for the company, which powers its best selling cars.
If further enhancement of compensation is granted, the company may have to discontinue the plant. The landowners want the enhanced compensation amount granted by the high court. HSIIDC (Haryana State Industrial and Infrastructure Development Corporation) had raised Rs. 500 crores demand on Maruti, this has been further raised from Rs. 28.15 lakhs to Rs. 37.40 lakhs per acre, which is a huge recovery notice for Maruti Suzuki.
Manesar is a crucial facility for Maruti Suzuki and for its global operations of the Japanese parent Suzuki. If a shutdown is declared, the company may have to face tremendous loss. The Manesar plant adopts modern processes for making cars, which is capable of churning out 5 lakh units annually from the set-up, which was planned to be increased up to 7.5 lakhs in the near future. On the positive side, Maruti Suzuki is setting up a big manufacturing unit in Gujarat.
Source – The Economic Times