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Maruti Suzuki to invest Rs 15,000 Crore on distribution and sale infrastructure

Snapshot: Maruti Suzuki is willing to invest Rs 15000 Crore over the next 5 years to double its sales and distribution infrastructure.

Maruti Suzuki, the homegrown auto major always had a primary advantage through its strong distribution and sales infrastructure.  So clearly, the company wants to keep-up with this crucial advantage in the future as well and that can be done through heavy investment. Reportedly, the brand has assigned a heavy investment of Rs 15,000 crore over the next 5 years to double its sales and distribution infrastructure.

Maruti Suzuki Chairman R C Bhargava said, “We have to double our network as the Gujarat plant output will lead to a gradual doubling of sales. The bulk of the investment required for additional sales will precede the start of production at our Gujarat plant. The total money needed for creating additional sales-and-service infrastructure has been estimated to be Rs 30,000 crore. Of that, half the money will be invested by us, and the rest by dealers.”

The brand operates over 1700 outlets in the country and the company’s chase for increased volume would be supported by the new Gujarat plant which is expected to go on stream by early 2017. The money will be spent to double its dealership network (more Nexa outlets would be established), expanding stockyard, warehouse and logistics infrastructure.  This initiation is a part of Maruti Suzuki’s goal to achieve 2 million annual sales by 2020.

It will be a challenging task for county’s largest passenger car maker with its current annual sales of 1.1 million units (in 2015-16), and the rise in pressure from its competitors.

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