New Delhi: The country's largest carmaker, Maruti Suzuki India (MSI), on Friday, said it has earmarked Rs 5,000 crore for capex in the current fiscal. The firm plans to invest in various activities including new product development, engineering, maintenance of plants and boosting its sales network.
MSI has also set aside close to Rs 1,000 crore, in fiscal 2018-19, to buy land for new dealerships.
"We have earmarked Rs 5,000 crore for capex for the current fiscal," MSI Chairman RC Bhargava told reporters in New Delhi. If need be, the company can invest a lot more in buying land in the ongoing financial year, he added. MSI invested around Rs 790 crore on land purchases in the previous fiscal.
As part of its network expansion strategy, the company plans to buy land, build dealerships and then lease them to selected dealers.
The trigger for the aforementioned move is the ever-increasing price of real estate across the country, especially in high-potential belts, which has impacted the profitability of dealerships
At the end of fiscal 2017-18, the company had 67 land parcels across the country.
MSI's bid to enhance its sales network comes at time when it has set a target to sell 20 lakh units per annum by 2020.
The company is flush with funds, thanks to a cash reserve of around Rs 34,000 crore.
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Updated Date: Apr 27, 2018 22:40:54 IST