Hero Honda to up capacity

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Hero Honda's proposed new plant will have a capacity of 4.5 lakh units while it will add a similar capacity to its existing plants. Honda Motor Co CEO Takeo Fukui announced as part of the company's world-wide expansion plans in Tokyo on Wednesday.

At present, the two-wheeler major has a capacity of 30 lakh units in its existing facilities at Daruhera, Gurgaon while Honda's 100% subsidiary Honda Motorcycles and Scooters India has a production capacity of 9 lakh units per annum. Hero Honda is investing around Rs 320 crore in 2006 to ramp up capacity as well as for its proposed third plant, managing director Pawan Munjal had announced during the Auto Expo in January. While company officials remain tight-lipped about the new plant's location, it is widely believed that it would be set up in Rajasthan.

In his speech, Mr Fukui said, as a result (of the proposed additions) annual motorcycle production capacity in India will increase by 9 lakh units to a total of 52 lakh units by 2007. This means HMSI will also increase its production capacity by about 4 lakh units in the same period. At the launch of its second model 'Shine', the company had announced it would invest Rs 400 crore to increase its capacity to 20 lakh units by 2010. The Honda group's stated aim to is to maintain a combined 50% market share in India via the two companies. At present, Hero Honda itself has close to 50% share.

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