Honda to invest Rs 965 cr to hike car, 2-wheeler production

Japanese auto major Hondau0027s cars and two-wheelers subsidiaries in India will invest a total of Rs 965 crore to increase their respective...

By: | Updated: April 13, 2016 9:33 PM
Honda Cars, Honda India, Honda Rajasthan

The annual production capacity of the plant will be increased to 1.80 lakh units from the current 1.20 lakh units, Honda Cars India said in a statement. (Reuters)

Japanese auto major Honda's cars and two-wheelers subsidiaries in India will invest a total of Rs 965 crore to increase their respective production capacities at two existing plants in India by 2016.

The company's wholly-owned arm, Honda Cars India Ltd (HCIL) will invest Rs 380 crore in its second plant at Tapukara in Rajasthan to expand production capacity to 1.80 lakh units from the current 1.20 lakh units.

At the same time, Honda's 100 per cent subsidiary Honda Motorcycle & Scooter India (HMSI) will also invest Rs 585 crore to hike production capacity at its third plant at Narsapura in Karnataka by setting up a new line to take overall annual capacity of the facility to 24 lakh units.

In separate statements, HCIL and HMSI said their respective capacity expansions would be completed by mid and before-end of 2016, respectively.

HCIL said: "The additional capacity is scheduled to be ready by middle of 2016. This capacity expansion will generate a fresh employment of about 600 people in Tapukara plant."

The expansion of the second plant will increase HCIL's overall annual production capacity from the current 2.40 lakh units to 3 lakh units, including the 1.20 lakh units capacity of the first plant in Greater Noida, it added.

With robust response to its models, including sedans City and Amaze, the company has witnessed 44 per cent growth in its domestic sales during April 2014 to February 2015 at 1,66,366 units as against 1,15,913 units in the corresponding period in FY14.

On its part, HMSI said a new production line will be set up within the existing plant site that will add 6 lakh units annually to take up the total capacity of the facility to 24 lakh units before the end of 2016.

"Combined with the additional capacity of upcoming 4th plant (in Gujarat), which is scheduled to become operational in the first half of 2016, this expansion will increase HMSI's overall annual production capacity to 64 lakh units," it added.

HMSI's two other plants are at Manesar in Haryana and Tapukara in Rajasthan.

Commenting on the development, HMSI President & CEO Keita Muramatsu said: "Honda is strengthening its 'Make in India' resolve through steady and strategic investments with a long term objective of creating 39 per cent additional capacity within 3.5 years.

"We are planning to increase the number of associates in the plant by approximately 1,900. This investment will provide new opportunities for expansion of brand Honda in the largest two-wheeler market of the world."

HMSI sales grew 22 per cent in the April-February period of this fiscal at 40,53,867 units as against 33,29,882 units in the same period of last fiscal.

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