Maruti Suzuki will be investing a hefty sum in a strategy to help the company maintain their position in the automobile industry in the future.
Maruti Suzuki, the largest passenger car maker in India, is planning to invest Rs. 15,000 crores in India within the next 5 years, in a strategy to increase their annual sales to about 2 million units by 2020. The money will be spent in procuring land for expanding stockyard, warehouse, transportation structure and doubling its already wide dealership network in the country. The commissioning of the company’s new plant in Gujarat in 2017 is expected to help in boosting the sales of the company.
Maruti Suzuki chairman R C Bhargava said that the company will have to double their network as the output from the Gujarat plant will lead to a gradual doubling of sales. He further added that the total investment required for creating additional sales and service infrastructure has been estimated to be around Rs. 30,000 crores, of which, 50% will be invested by the company and the rest will be invested by the dealers.
The creation of the current wide network which had initially cost them Rs. 11,000 crores, now costs them a whopping Rs. 30,000 crores, due to the huge increase in land prices. The company plans to buy land at places where it would like to open its future dealerships and workshops and give them on lease to dealers, who would pay rent to the company. This move will ensure that dealers don’t turn towards profitable businesses and would secure the company’s network in the future.
The Delhi based company already has more than 1700 outlets in the country. Recently, the automaker set up a new sales network, called NEXA, to encourage sales of their premium cars. It now plans to set up a network for its upcoming light commercial vehicles section with the first LCV set to launch next year.