"All the investments would be made by SMC. This arrangement will strengthen Maruti Suzuki as the profit does not come from manufacturing cars. It comes from selling cars and the right models, with the competition intensifying in the market," R.C. Bhargava, Chairman, Maruti Suzuki said during his address at the company's 33rd Annual General Meeting (AGM).

According to Bhargava, the new car manufacturing plant will be financed by Suzuki Motor Corporation (SMC). "Maruti Suzuki will use its cash for investing in marketing and sales, expanding network and making right models," he said.

The Indian company is the biggest subsidiary of SMC both in terms of profits and turnover. Currently, it has a cash reserves of around Rs.8,000 crore (USD 1.3 billion).

In the current fiscal, the company said it expects sales volume to grow by the double digits. Sales have expanded by 16 percent in the first five months.

The company further said that it will now pay royalty to SMC in Indian rupees to get insulated from currency fluctuations. The company further said that it has been working on a Sports Utility Vehicle (SUV), a compact SUV and a light commercial vehicle.

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