Honda is planning to expand their third motorcycle production plant and second automobile production plant by investing Rs. 965 crores.
Honda has been having a good run in our country for a very long time thanks to its brand image and customer satisfaction levels. They are having a good time retailing the new City, which is the best-seller in the segment, Amaze compact sedan and the recently launched Mobilio MPV to name a few. While talking about their two-wheelers, India is currently Honda’s biggest market in the whole world. So, one can imagine that its not long before Honda plans to take things further and get a bigger piece of the Indian automotive industry’s pie. Following their recent run of form, Honda has announced that all of their automobile production and sales subsidiaries in India, i.e., both Honda two and four-wheelers have each decided to expand their annual production capacity in line with the expected continued future growth of the Indian market.
They are planning to expand its third motorcycle production plant and second automobile production plant, which are both currently under operation. The overall investment is worth to be Rs. 965 crores. Out of this, Rs. 585 crores will be allocated to the two-wheeler factory in the Narsapura area of southern India, thus creating about 1900 jobs in the process. The Narsapura factory started its operations in June 2013 and can annually produce 18 lakh units. The new production line is scheduled to become operational in 2016, thereby expanding its annual production capacity by 6,00,000 units, increasing the plant’s total annual production capacity to 24 lakh units. The remaining Rs. 380 crores will be invested to raise the capacity of its Tapukara four-wheeler factory in Rajasthan by 50 percent to 1,80,000 units a year, hiring 600 additional workers. This plant became operational in February 2014 and has a current annual production capacity of 1,20,000 units.
In 2014, Honda motorcycle sales increased to approximately 42 lakh units experiencing a year-on-year increase of approximately 30 percent as compared to a 10 percent year-on-year increase in the segment. When Honda’s fourth two-wheeler plant becomes operational in 2016, this combined with the expansion plans will make India Honda’s largest motorcycle production line in the world. On the other hand, Honda four-wheeler sales have also been pretty good selling approximately 1,80,000 units, experiencing a year-on-year increase of 67 percent as compared to a year-on-year increase of 3 percent in industry-wide passenger automobile sales in India in 2014.