A decision on manufacturing would be made over the next year or so. At present, the company manufactures general purpose engines, water pumping sets and portable gensets at its two facilities at Rudrapur in Uttar Pradesh and Pondicherry.

Honda Siel Power Products president and chief executive officer Yasuro Nakano said the company would study the market response to these two products during the next few months before taking any decision.

He said, manufacturing of these two products would involve additional investments to the tune of Rs 30 crore in plant and machinery. Therefore, local manufacturing would be justified only if demand for 5 KVA engines and land mowers is substantial.

The company had announced the launch of these two products alongwith a range of portable generators, generalpurpose engines, water pumpsets, outboard motors and agri-appliances under the Honda brandname on Tuesday. Until now, the products were being sold under the Shriram Honda brand. The change in brand name for the products follow the sellout of stake by the Indian partner, the Siddharth Shriram group's Siel Ltd.

Siel may buyback upto 10 per cent of the shares in Honda Siel Power Products at a price to be decided by the two companies. According to Shriram, the two partners have an opened-ended arrangment for the buyback of the shares by Siel.

Nakano further stated that Honda is also considering a holding company in India for its operations. At present, Honda Motors is a partner in three joint ventures in the country, two of which are with Siddharth Shriram group and the third with Hero group for motorcycles.

Meanwhile, water pumps will be one of the major thrust areas for Honda Siel this year.

Honda Siel director RS Bidesi said the company expected the contribution of water pumps to the total salesturnover is set to jump to about 25-30 per cent in the current financial year, from the previous year's level of 20 per cent.

Currently, over 60 per cent of the turnover of the company comes from portable generators portfolio while exports of engines account for the balance 20 per cent.

Bidesi further added that the company would step up capacity utilisation from the existing level of 65 per cent by pushing the products in the export as well as domestic market.