Maruti Suzuki plans to raise its production next financial year to meet demand and prevent loss of market share.

The carmaker plans to raise annual manufacturing output to 1.4 million units starting April 2011, said two analysts briefing about the company’s third quarter earnings.

The firm presently has a manufacturing capacity of 1.2 million vehicles annually at its two factories in Gurgaon (850,000 units) and Manesar (350,000 units) and is looking to raise it to 1.3 million vehicles by the end of the current financial year.

By October next financial year, Maruti Suzuki will start operations on a new assembly line in Manesar, with an annual manufacturing output of 300,000 units, helping it to further raise output from the month.

This will roughly translate into a monthly output of about 125,000 to 130,000 cars starting October from about 100,000 to 110,000 cars at present, enabling it to release capacity bottlenecks.

When contacted, Ajay Seth, chief financial officer, Maruti Suzuki India, refused to share any numbers on production plans. “We are in the process of setting the annual targets and will decide in a week’s time.”

Maruti has been selling whatever it produces this financial year with the car market growing at 27 per cent due to strong economic fundamentals. Between April and December, Maruti Suzuki produced 924,103 units and sold 927,665 units, a growth of 31 per cent, according to Siam (Society of Indian Automobile Manufacturers).

The fresh output will help the firm increase production of segment leading models like the Swift hatchback and Dzire sedan, whose waiting period ranges from two to three months, helping it to fend off competition from rivals Hyundai Motor, Ford and Volkswagen.

“Even if the overall market grows at 15 per cent, the company should be able to utilise more than 90 per cent of installed capacity, which they have potentially been building up for the past two quarters,” one of the brokerage firm analysts said.

Maruti Suzuki plans to invest Rs 3,625 crore to raise installed manufacturing capacity to 1.75 million units annually by 2012-13.

Meanwhile, on Saturday, the company reported an 18 per cent decline in net profit at Rs 567 crore for the third quarter ended December as higher input costs, rising Yen and more royalty payments dented margins despite record sales. Profit in the October - December quarter last year stood at Rs 687 crore.