Maruti Suzuki is likely to defer proposed investments in Gujarat as rising interest rates and fuel prices in a cooling economy force prospective buyers to retreat. The world's second fastest growing market for vehicles has seen passenger car sales slump by 4% this fiscal.

Mr RC Bharagava chairman of Maruti Suzuki told ET that "We may relook at our long time investment because of the slowdown. We are relooking at the timing of our investment. We may have to delay some of the investment by six months to a year."

Mr Bhargava said that "We are worse off than the industry because we had the strike. We are trying to reach last year's volumes; but we will end up worst than the industry by minus 5 to 8%.”

Mr Bharagava said the company would have a better idea of the investment and timeline of its Gujarat expansion after the Union government presents the budget for 2012-13 in February.

He, however, said Maruti would go ahead with planned investments of INR 3,000 to 4,000 crore in its existing plants, a new unit in Manesar, research and development, and in setting up stockyards across the country.

Mr Bhargava said Maruti's production facility in Gujarat would come up only when the capacity of its Manesar and Gurgaon plants was fully utilised.

(Sourced from ET)