Honda to invest Rs 1,775 crore for two-wheeler factory expansion

Honda Motorcycle and Scooter India (HMSI) will invest Rs 1,775 crore in this financial year, on the expansion of its factory in Delhi and on the launch of new models. With nine new models slated for launch, Honda is planning to go big this year, in its bid to sell 47 lakh two-wheelers in this fiscal.

The Japanese manufacturer’s three manufacturing plants in the country - Manesar, Tapukara and Narsapura, are all running at their full capacity, which led to constraints in the company’s sales in the last fiscal. HMSI sold 44.5 lakh two-wheelers last year and with its new target, it aims to catch up with Indonesia in the race to become Honda’s top two-wheeler market.

Speaking to the media at an event in Delhi, Mr Keita Muramatsu, President and CEO, HMSI said, "In 2015-16 India will be second largest contributor to Honda's global sales accounting for 25 per cent. Currently Indonesia is number one, but considering the way Indian two-wheeler market is expected to grow, we may be able to be number one."

Of the 15 new products that the company planned to introduce this year, six have already gone on sale. With respect to factory expansion, Mr Muramatsu said that HMSI will be adding a fourth plant in Gujarat which should bump up the total capacity by 18 lakh units. Along with a new third assembly line at the Karnataka plant, the company's overall production capacity should go up to 64 lakh units by the end of 2016. Besides the expansion of the factory and its product line-up, HMSI will also add 800 new outlets, to increase its presence across the country.