Honda Motorcycle & Scooter India on Thursday laid the foundation stone for its fourth two-wheeler plant in Gujarat. The country’s second largest two-wheeler maker will invest around ₹1,100 crore to set up the plant.
With an installed annual capacity of 12 lakh units, the plant, coming up in 250 acres in Vithalapur, 80 km from here, will be the world’s largest scooter-only facility.
The company already enjoys a 55 per cent share in India’s scooter market and 22 per cent in the overall two-wheeler segment. It is planning to sell nearly 45 lakh units this fiscal, almost utilising the total production capacity of 46 lakh at three existing plants.
The new facility will increase the company’s two-wheeler capacity to 58 lakh units, Keita Muramatsu, President and CEO, Honda Motorcycle and Scooter India, said here on Thursday.
Hero MotoCorp, the country’s largest two-wheeler maker, has four operational plants in India—Gurgaon, Daruhera, Haridwar and Neemrana—with a total installed capacity of 94.5 lakh units a year.
The Vithalapur plant will start commercial production by the end of 2015, and is expected to achieve full production capacity of 12 lakh within a year. With this, Honda’s total investment in India will become ₹6,200 crore. The company’s three other manufacturing plants, making both scooters and motorcycles, are at Manesar (Haryana), Alwar (Rajasthan) and Kolar (Karnataka), with production capacities of 16 lakh, 12 lakh and 18 lakh units, respectively.
Strong demand Muramatsu said Indian automatic scooter market is growing 2.5 times the speed of overall two-wheeler industry growth. “The latent demand of automatic scooter is so strong that with improving infrastructure in rural India, we foresee that this segment sale can go up to 35 per cent of overall two-wheeler sales in 5-10 years,” he added. “As the world’s biggest two-wheeler market, India is already a priority for Honda. In 2014-15, Honda aims to sell 18.2 million worldwide and for the first time, India will contribute almost 25 per cent to global Honda sales,” said Noriaki Abe, Chief Operating Officer, Honda Motor Company - Asia and Oceania Region.
With a presence in more than 40 countries globally, Honda’s worldwide two-wheeler sales volume in 2013-14 was 1.70 crore units, a year when India’s contribution to it crossed the 20-per-cent mark, making it the second largest contributor that year. Honda exported 1.7 lakh units last year from India.
With inputs from S Ronendra Singh in New Delhi