In an important meeting held on May 31, 2011, the senior management of Maruti Suzuki India met with the Chief Minister of Gujarat, Narendra Modi, and expressed their interest to set up a manufacturing plant in Gujarat. The plant is expected to have a production capacity of 10 lakh units per annum, expandable up to 20 lakh. For the first phase of production of cars, Maruti intends to invest Rs. 6,000 crore.
According to the statement released by the state government, the duo, i.e., the Managing Director of Maruti Suzuki, Mr. Shinzo Nakanishi, and the Chairman, Mr. R C Baraga, during their meeting with Mr. Narendra Modi, expressed that Gujarat would be their first preference for the expansion project. They also expressed hope that the location of the site along with the other formalities for the phase-1 of the project would be completed in three months time. It is estimated nearly 1.5 lakh people could gain employment because of the plant. Gujarat government has offered Maruti Suzuki land at three locations: Sanand, Dholera and Halol. As per the sources in the state secretariat, the location at Sanand, which also has the Tata Motors plant to manufacture Tata Nano, is most likely to be the preferred site.
The primary reason for the company to prefer Gujarat over other states to set up its plant is its coastline. It would lower the company’s transportation and logistics costs for overseas export since Maruti exports its cars from Gujarat’s Mundra port.