The plant, which will initially have a capacity of 100,000 cars per annum, with the scope to scale it up to 250,000 units, is part of a larger investment plan finalised by Maruti and Suzuki for the medium term, a MUL release said.

The total investment in the new car plant will be Rs 1,524.2 crore, it said. Speaking on the occasion, Jagdish Khattar, MUL managing director said "Our investment in a new car manufacturing plant underlines our parent company, Suzuki Motor Corporation's continued commitment to India.

It also reflects Maruti's optimism about the future of the Indian car market." Apart from the new car plant, fresh investments will be made in an engine and transmission facility, upgradation of Maruti's existing plant in Gurgaon and in new models, the release said.

The new car manufacturing plant will begin commercial production by the end of 2006. It is being set up under a joint venture company, called Maruti Suzuki Automobiles India Ltd, in which MUL will hold 70 per cent equity while Suzuki Motor Corporation, Japan, will hold the remaining 30 per cent, it said.