Leading automaker Maruti Suzuki is looking to set up a new factory in India's western Gujarat state as the firm looks to boost production by up to two million units a year, according to a report.
The Business Standard said the firm was exploring the possibility of a new plant over 500 acres (202 hectares) in the state, where Tata Motors' low-cost Nano model is already built.
Company chairman R.C. Bhargava and managing director Shinzo Nakanishi met Gujarat's chief minister Narendra Modi on Tuesday to inform him of their interest, the financial daily said.
Bhargava said Modi was positive about the project but while Gujarat "seems to be a high probability state for us", nothing was finalised.
"It is too early to say anything about the location of the proposed plant, as we have not yet decided anything about it," Bhargava was quoted as saying.
"The state government has shown us a few locations and it will take two to three months to finalise."
Maruti Suzuki, which already has a manufacturing unit in the northern state of Harayana, wants to expand its capacity by a million cars a year, the chairman added.
A new plant would accommodate that, plus further expansion for another million units over the next five years, he said. Maruti sold 1,271,005 cars in 2010-11, up 24.8 percent on the previous year.
Maruti Suzuki is India's largest car maker by sales but has seen its share of the domestic market shrink by five percent to 45 percent due to fierce competition from rivals.
Company shares on the Bombay Stock Exchange were up 8.5 rupees or 0.69 percent at 1,236 mid-morning.
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