Honda starts operations for building two-wheeler plant in Karnataka

Monday 03 October 2011, 15:39 PM by

Honda Motorcycle and Scooter India (HMSI) have begun work for setting up its 3rd production facility in India. The company already has two manufacturing facilities in Haryana and Rajasthan. However, this time, the plant will be located at Kolar, near Bangalore. Honda Motorcycle and Scooter India is a wholly owned subsidiary of the Japanese automobile giant Honda Motor Company.

For this facility, Honda Motorcycle and Scooter India will make an investment to the tune of Rs. 1,000 crores. The Kolar plant will spread across an area of 3,50,000 square metres. This manufacturing facility will be operational by the end of the first half of 2013. Upon completion, this plant will provide an annual capacity of 1.2 million units. This facility will cater to production of scooters as well as motorcycles. This plant will take the production capacity of Honda Motorcycle and Scooter India to 4 million units per annum.

Honda Motorcycle and Scooter India, currently, has two factories namely, Manesar plant in Gurgaon district of Haryana and Tapukara Industrial Area in Rajasthan. The Manesar factory has been operational since 2001, and by 2007, it managed to achieve an annual production capacity of 6,00,000 scooters and 4,00,000 motorcycles. Spread over 52 acres, the Manesar plant has a covered area of 85,815 square metres and is located at the outskirts of Delhi. On the other hand, the Tapukara facility in Rajasthan became operational in July 2011, with the initial production capacity of 0.6 million. However, currently, it produces 1.2 million units per annum.

At the foundation stone laying ceremony of the new Kolar plant, Keita Muramutsu, President and Chief Executive Officer at Honda Motorcycle and Scooter India, said: “The increase in capacity by the addition of the new plant would prepare the company for further growth, cut down the waiting period of vehicles, and cater to rising demand in India's 11.32 million units two-wheeler market. At present, three products – Activa, Shine and Unicorn – have an average waiting period of three months, which the company wants to bring down to 15 days to 30 days.” Muramutsu further added that “India is too big a market. We have two facilities in the north, but we needed a facility in the south and in particular Karnataka as it is one of the big southern markets for HMSI.”

According to Honda Motorcycle and Scooter India company officials, a number of ancillary units will be developed around this new plant. Subsequently, it will help the company to produce units at a localised level as high as 80%. As of 2010, Honda Motorcycle and Scooter India had a 13% market share in the two-wheeler market in India. However, the company plans to increase its market share, marginally, to 14% by the end of this year.

Thus, Honda will be yet another automotive giant that will have its production facility in the southern state of Karnataka. The state is also home to manufacturing facilities of Japanese automotive company Toyota and Swedish commercial vehicle manufacturer Volvo.

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