Honda plans second small car

Written by Corporate Bureau | New Delhi, Feb 25 | Updated: Feb 26 2008, 06:47am hrs
Honda Siel Cars India (HSCI) is bullish about the small car segment in India. The company is mulling to come up with a second compact car in the country after the launch and response to its first compact car that is expected to hit roads in 2010.

"We have initiated an internal study on the second compact car and its launch will depend on the kind of response we get from the first car," says M Takedagawa, president and CEO, HSCI.

The company, which expanded the current capacity of its Greater Noida facility from 50,000 to 1,00,000 units, plans to rollout its compact cars from Rajasthan plant with an initial capacity of 60,000 units.

Honda will initially invest Rs 1,000 crore at its upcoming plant in Rajasthan and will take it up to Rs 3,000 crore in expanding the capacity to around 2.5 lakh units. This would also include the setting up a power train unit, which would be feasible only when the company has volumes to the tune of 2.5 lakh to 3 lakh units.

The Japanese auto major plans to expand its dealership network across 90 cities in the country in the next three years. "Gearing up for Honda's planned foray into the compact car segment, we are expanding our dealership network to 160 in 90 cities in the next three years," adds Takedagawa at the inauguration of the company's enhanced capacity at its Greater Noida plant.

The company currently has a network of 80 dealers in 51 cities and the number would be increased to 100 in 2008-09.