The company will spend up to Rs 400 crore on the expansion, a spokesperson said. Of this 50% would be used for actual factory expansion while the rest would be deployed for minor model changes and bringing in new cars. Honda is planning to launch the best seller Civic later this year.
Industry leaderMaruti Udyog Ltd has a capacity of 3.5 lakh units while it issetting up another plant of 2.5 lakh units. Hyundai Motors India, too, is setting up another plant of 2 lakh units to add to its 2.5 lakh capacity. Honda's capacity increase will see it become the fifth player to touch the one lakh mark. Other multinationals with sizeable capacities include GM with 80,000 units and Toyota with 60,000 units.
Honda had spent Rs 140 crore on increasing its production capacity from 30,000 units to 50,000 in December last year. The company, which makes the City and Accord models in India the CR-V being imported as a completely built unit - sells around 3,300 units a month.