More trouble: Maruti threatens to shut its Manesar plant

Troubles do not seem to end for Maruti Suzuki’s Manesar plant.

According to reports, Maruti Suzuki has threatened to shut its key Manesar plant in Haryana over prospect of paying additional compensation worth Rs 500 crore for over 600 acres of land where its plant is currently located.

This comes at a time when Maruti is planning to set up a massive manufacturing unit in Gujarat.

The threat to shutdown the Manesar plant is significant as the company produces blockbuster models like the Swift hatchback and Dzire sedan there. In fact, the plant is also its sole base for making diesel engines.

[caption id=“attachment_981517” align=“alignright” width=“380”]  Reuters[/caption]

Last month, the Supreme Court asked the Punjab and Haryana High Court to recalculate the compensation to be paid to the land-owners whose land was acquired in 1994 by the Haryana State Industrial and Infrastructure Development Corporation. The high court had enhanced the rate from Rs 28 lakh per acre to Rs 37.40 lakh per acre in Manesar and other fast developing areas of Gurgaon district.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

Maruti Suzuki and others have objected to the rate which they argue as excessive. Maruti argued it got the land at Rs 19 lakh per acre and that if it is enhanced, its financial health will be affected and the Manesar unit will have to be closed down.

While appearing for the company before the Supreme Court, counsels PS Patwalia and Abhishek Manu Singhvi said, “…If further enhancement is granted, the (Maruti) management may have to take a decision to discontinue the plant at Manesar,” reported Economic Times.

The Supreme Court has now asked the parties to approach the High Court again with their respective pleas while ordering HSIIDC to pay the enhanced compensation to the landowners and/or their legal representatives, along with all statutory benefits, within a period of four months.

Impact Shorts

More Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

Recently, Maruti had decided to shut down third shift at its diesel engine plant in Manesar and had asked 200 contract workers to go on indefinite leave after severe shortfall in demand. With this new crisis looming, will Maruti shut down its Manesar plant?