The cost of land acquisition, development and preparatory activities approved bv the board is Rs 4,960 crore, the company said in a stock exchange announcement.
The land for expansion of production capacity at Khoraj Industrial Estate will be acquired from Gujarat Industrial Development Corporation.
The total existing capacity is around 24 lakh units per annum in Gurugram, Manesar, Kharkhoda.
Hansalpur, Gujarat has a capability to produce 26 lakh units per annum. This includes the units produced at erstwhile Suzuki Motor Guiarat Private Ltd which has been amalgamated with the company.
Maruti Suzuki said the existing capacity is fully utilized and rationale for the expansion is growth in market demand including exports.
The expansion will be funded through combination of internal accruals and external borrowings., it said.
The time frame for expansion and the required investment will be finalized, while framing the phases of installation of capacity.
