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Honda bike co to expand capacity

Buoyed by the success of its scooter model Activa, Honda Motorcycle and Scooter India says it will invest Rs 400 crore in the next two-three years on capacity expansion.

india Updated: Sep 27, 2006 14:57 IST

Buoyed by the success of its scooter model Activa, Honda Motorcycle and Scooter India today said it would invest Rs 400 crore in the next two-three years on capacity expansion.

"Our combined capacity of scooters and motorcycles at the existing facility is about 9 lakh units annually. In another two to three years we are aiming at increasing it to 1.2 million units," Honda Motorcycle and Scooter India (HMSI) President and CEO Yukihiro Aoshima told reporters in New Delhi.

He said the company would invest Rs 400 crore for the purpose, which will be entirely funded by HMSI through its reserves.

Aoshima said, HMSI, the wholly owned subsidiary of Japan's Honda Motor Co, was looking at selling about 7.5 lakh to 8 lakh units of two wheelers this year, up from the 6 lakh units it sold last year.

It expects to sell about 5 lakh scooters and 2.5 to 3 lakh motorcycles.

"In another three year's time our aim is to have an equal amount of scooters and motorcycles sold," Aoshima said.

The company has achieved sales of one million units of its popular model Activa and plans to introduce further models to strengthen its position.

"We are looking at launching two variants of our existing two wheeler model this fiscal," he said, however, declining to disclose any details.

"The matter was solved between the contractors and their workers. We are looking ahead," he said.

Asked if the firm was looking for synergies with Hero Honda, the joint venture of its parent company with Munjals, Aoshima said the two companies did cooperate in market analysis.

"We do have periodic joint meetings to discuss market focus and analysis and also on the future product lineups," he said.

Aoshima, however, clarified that the company was not looking at sharing vendors or other distribution network with Hero Honda.

"We are a separate company and we have our own business strategies," he said.

On the future products, specially motorcycle, he said, HMSI was mulling over bringing fuel injection technology driven bikes to India.

"That's a technology of our parent company and we are looking at having it here as well," he said.

Hero Honda had recently launched the 'Glamour' model with fuel injection technology.

HMSI had touched a turnover of Rs 1,500 crore last year and the company has so far invested Rs 600 crore in India since its inception.