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Hero Honda looking at a fourth factory

The country's largest two wheeler manufacturer Hero Honda today said it is looking to set up its fourth manufacturing plant in the country admitting that the high demand for its products is forcing it to expand capacity earlier that it has planned reports Sumant Banerji.

autos Updated: Jan 06, 2010 23:18 IST
Sumant Banerji

The country's largest two wheeler manufacturer Hero Honda today said it is looking to set up its fourth manufacturing plant in the country admitting that the high demand for its products is forcing it to expand capacity earlier that it has planned.

"We were pleasantly surprised by the continuous growth in sales for our two wheelers, especially in the post Diwali period when sales generally cool off a little bit," said Pawan Munjal, managing director and CEO, Hero Honda Motors.

"With this pace of growth we will need to add new capacity and are looking at another factory in some other location besides the ones where we are already present."

Hero Honda has three manufacturing plants, two in Haryana and one in Uttarakhand, with a combined production capacity of over 5 million units per annum.

The company had targetted sales of 4 million units in the beggining of this fiscal, but Munjal said it should cross 4.4 million units sales by the end of March. The company has sold 3.35 million units in the current fiscal till December 2009.

"We have still not utilised our full capacity in the three plants and are using various permutations and combinations to expand it further in the existing plants," he added.

Hero Honda has a 59 per cent marketshare in the domestic two wheeler industry and is the world's largest producer of motorcycles.