Maruti Suzuki's annual sales target raised to 2.5 million units by 2025

Maruti Suzuki India Ltd has raised its sales target for the second time in two years to 2.5 million units every year by 2025, said a LiveMint report.

Citing people with the knowledge of the matter, the report said that the auto firm, which had in 2015 set itself a target of 2 million in sales by 2020, will achieve that target one year ahead of schedule.

According to the report, the company’s management in meetings with tier-1 suppliers asked vendors to ramp up investments near manufacturing facilities of Suzuki Motor Gujarat (SMG). Some of the vendors have reportedly started to increase investments in the state to meet the capacity requirements.

SMG and Maruti have reportedly a contract manufacturing agreement, wherein the latter buys products from the former’s factory at cost price.

It may be noted that Maruti sold 1.5 million units in 2016-17.

“Maruti Suzuki has set a target of 2.5 million vehicles by 2025 and the component suppliers have been asked to ramp up their respective capacities in and around the Gujarat plant. Though the target is pretty ambitious, Maruti as a company has always been successful in achieving sales targets,” the person, knowledge of the matter, told the Mint. 

The second person reportedly said, “Maruti Suzuki has set a target of selling 25 lakh (2.5 million) vehicles by 2025 which is ambitious but given the product line-up and capacity it will have in Gujarat, the target is achievable. Some of the component suppliers have plants in both Hansalpur and Sanand, so they have been ramping up both the facilities.” 

According to the second person cited, the company is making an investment of about Rs20 crore in its existing facility in Gujarat to expand production, and the exercise is expected to be completed by 2019.

RC Bhargava, Chairman of Maruti Suzuki, reportedly said the current capacity at the Gujarat facility is 250,000 cars a year, and another line with equal capacity will be added in 2019.

The company's spokesperson was quoted as saying, “Our suppliers are also aligned to our business goals and will make investments in ramping up their capacities accordingly. A third line (Line C) will be added depending upon market situation and our suppliers will also align to it.”