Maruti sees $1.8 billion savings on Suzuki agreement

NEW DELHI Fri Jun 6, 2014 7:08pm IST

A worker is reflected on the body of a Maruti Suzuki car as he locks the door of another car at a Maruti Suzuki stockyard on the outskirts of Ahmedabad May 2, 2014. REUTERS/Amit Dave/Files

A worker is reflected on the body of a Maruti Suzuki car as he locks the door of another car at a Maruti Suzuki stockyard on the outskirts of Ahmedabad May 2, 2014.

Credit: Reuters/Amit Dave/Files

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NEW DELHI (Reuters) - Maruti Suzuki India Ltd, the country's biggest car maker, said it expected a saving of about 105 billion rupees over 15 years by entering into a contract manufacturing agreement with parent Suzuki Motor Corp.

In January, Suzuki said it plans to build a wholly-owned car plant in Gujarat that will supply exclusively to Maruti. The plan has met with resistance from some of Maruti's large Indian shareholders.

Maruti, pending shareholder approval, plans to enter into a contract manufacturing agreement with Suzuki for 15 years, which can mutually be extended by another 15 years, it said in a presentation, a copy of which it filed to the stock exchanges.

Suzuki will invest a total of about 185 billion rupees to build the plant that would eventually have a capacity of 1.5 million cars, Maruti said on Friday.

(Reporting by Aditi Shah; Editing by Subhranshu Sahu)

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