Honda to set up second motorcycle production unit in India

Honda Motorcycle & Scooter India Private Limited (HMSI), Honda's wholly-owned motorcycle production and sales subsidiary in India, today said it planned to build a second motorcycle production plant to meet the growing demand in India.

A press release from the company said it would acquire approximately 240,000 square metres of land within the Tapukara Industrial Area, near Bhiwadi in Rajasthan for the new plant.

The location is about 40 km from the existing plant and about 90 km from Delhi, the releas said.

The new plant is scheduled to become operational in the second half of 2011 with an annual production capacity of 600,000 units. Further, HMSI is expanding annual production capacity of its existing plant from the current 1.25 million units to 1.55 million units by the end of this month, with a further expansion to 1.6 million units already scheduled for next year.

As a result, HMSI's total annual production capacity will be 2.2 million units when the second plant becomes operational. The new plant will employ approximately 2,000 associates at initial stage of full capacity. The total investment will be approximately Rs. 4.7 billion (approximately 8.9 billion yen), the release said.

According to the release, India represents the world's second largest motorcycle market behind only China, and industry-wide motorcycle sales in India for 2009 reached 8.8 million units (up 19% compared to 2008).

HMSI was established as a wholly-owned motorcycle production and sales subsidiary of Honda in 1999 and began production in 2001. HMSI's sales have grown steadily with 2009 sales of approximately 1.1 million units (up 11% compared to 2008) achieving a record high for nine consecutive years.

In order to fulfill the diversifying needs of customers in the growing market of India, HMSI is enhancing its product line-up with last year's full model change of the Activa 110cc scooter, one of the company's best-selling products, and by introducing the CB Twister 110cc motorcycle in February 2010 in the 100-110cc market segment, which accounts for approximately 50% of total motorcycle market.

NNN