Suzuki Motor Chief Meets Gujarat Chief Minister

Gandhinagar: Suzuki Motor Corp chief Osamu Suzuki met Gujarat Chief Minister Anandi Patel on Friday, even as the state government cleared issues related to the company owning and investing at the upcoming plant in the state instead of its Indian arm, Maruti Suzuki.

Mr Suzuki discussed with the minister the Japanese auto major's proposed plant coming up at Hansalpur village of Ahmedabad district at an estimated investment of Rs 4,000 crore, according to an official statement.

He told Ms Patel that the plant would be operational by May 2017, it added.

A senior government official said the state has sorted out all the issues pertaining to the transfer of ownership of the Gujarat plant to Suzuki from Maruti Suzuki India (MSI).

"At present, all the technical issues have been sorted out. Concession on VAT is not at all an issue, as we are going to give them concession," the state's Additional Chief Secretary Finance, Hasmukh Adhiya, said.

The plant was originally proposed to be set up Suzuki's Indian arm Maruti Suzuki India. It was, however, decided that the Japanese parent would own and invest there.

The move was opposed by institutional shareholders in Maruti Suzuki, forcing the company to seek minority shareholders' approval after tweaking original proposals and the voting is expected to be held sometime in October.

It had also led to issues on the agreement with the state government as it was signed with Maruti Suzuki and not Suzuki. Such an investment by Suzuki would have to be considered a foreign direct investment (FDI), requiring the government to rework rules related to VAT concession to clear the proposal.

Earlier during June this year, Maruti Suzuki India chairman R C Bhargava had met Ms Patel and Finance Minister Saurabh Patel to sort out the issues.

The plant was meant to be Maruti Suzuki's first plant outside Haryana and third in the country after Gurgaon and Manesar. Now, it is is being proposed to be set up another wholly-owned company of SMC -- Suzuki Motor Gujarat Pvt Ltd.

During June 2012, the state government allocated 700 acres of land to Maruti Suzuki India Ltd (MSIL) near Hansalpur to set up its plant. At that time, it was announced that MSIL will invest Rs 4,000 crore.

During their meeting on Friday, Ms Patel extended a formal invitation to Mr Suzuki to attend the forthcoming 'Vibrant Gujarat Summit-2015' to be held in January.

Mr Suzuki told Ms Patel that a high-level delegation will participate in the upcoming summit, a press release said. During the meeting, Mr Suzuki also briefed her about the recent visit of Prime Minister Narendra Modi to Japan.