Honda Motorcycle & Scooter India expects to ramp up production to four million two-wheelers a year from mid-2013 when its third plant starts functioning, according to its senior officials.

The third plant at Narasapur, 52 km from here in Kolar district, will make 1.2 million bikes and scooters a year. Honda is investing Rs 1,350 crore in the plant that will employ 3,000 people.

Mr Takashi Nagai, parent Honda Motor Company's Operation Officer - South West Asia, and Mr Keita Matsumara, President and CEO of the Gurgaon-based HMSI, participated in the ground breaking ceremony of the 96-acre plant. The Chief Minister, Mr D.V. Sadananda Gowda, and the Union Minister for Railways, Mr K.H. Muniyappa, who is MP for Kolar, were present.

HMSI currently produces 2.8 million two-wheelers a year: 1.6 million at the Manesar, Haryana, plant and another 1.2 million at Rajasthan's Tapukara.

Mr Nagai was non-committal when asked if Honda would add cars to the plant. Tapukara has a car and a two-wheelers plant.

At a news conference later, Mr Matsumara said three to four new products were slated to roll out next year.

In the past year, material costs shot up 15 per cent for the company and he did not rule out its impact on some of their two-wheeler prices.

India was a priority market and Honda's second largest motorcycle buying domain after China. “The South is a big market and we need a southern base,” he said. Honda would focus on the meeting the domestic demand.

Local sourcing at 70 per cent was mostly from the North and the West; the Narasapur plant would also attract another 15-20 ancillary units and increase sourcing from the South, he said.

The third plant would reduce the waiting period for the Activa scooters and Unicorn motorbikes among others, perhaps to under a month, Mr Naresh Kumar Rattan, Vice-President, Sales, Planning and Corporate Affairs, said.

Honda makes Activa, Dio and Aviator scooters and six motorcycle variants including the popular Unicorn, Twister and Shine.

Last year, in its 11th year, HMSI revved up sales 40 per cent; it sold 16.5 lakh units in a national market that snapped up 11.32 million units; the domestic market grew at 30 per cent year on year.

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