Honda to invest Rs 1,775cr to expand 2-wheeler capacity | business | Hindustan Times
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Honda to invest Rs 1,775cr to expand 2-wheeler capacity

business Updated: May 06, 2015 15:44 IST


Japanese auto major Honda will invest Rs 1,775 crore this fiscal year to expand two-wheeler production capacity and to facilitate the launch of new models in India.

The company's wholly owned subsidiary, Honda Motorcycle and Scooter India (HMSI) plans to introduce 15 new products this year, out of which seven are brand new models.

It will also start the assembly of the high-end sports bike CBR 650F in India.

"In 2015-16 India will be second largest contributor to Honda's global sales accounting for 25%. Currently Indonesia is number one, but considering the way Indian two-wheeler market is expected to grow, we may be able to be number one," HMSI President and CEO Keita Muramatsu told reporters.

In 2014-15, HMSI sold 44.5 lakh units and is eyeing to sell 47 lakh units in this fiscal.

Currently, it is facing capacity constraint at all of its three plants in Manesar (Haryana), Tapukara (Rajasthan) and Narsapura in Karnataka that are running at full capacity.

Commenting on when India could become Honda's number one global two-wheeler market, Muramatsu said, "In the next two years when we have Gujarat plant and additional capacity in Karnataka plant ready, we may be able to be number one."

Speaking about the company's plans for the ongoing fiscal, he said "We will be adding a total of 18 lakh units with the fourth plant at Gujarat expected to come during this fiscal and another third line being added at the Karnataka plant."

While the Gujarat plant is expected to be operational in this fiscal, the additional capacity at the Karnataka plant will be ready by the end of 2016 to take the company's overall production capacity to 64 lakh units annually.

The total investment for the fiscal, including capacity expansion and new model launches is Rs 1,775 crore.

"The majority of this investment will be on the Gujarat plant and the rest on Karnataka plant expansion and new models," HMSI Senior Vice President (Sales and Marketing) Yadvinder S Guleria said.