Honda is having a clear cut goal of producing 10 million units in its two wheeler wing by fiscal year (FY) 2019-20, which may add the production plants up to eight in the country. This shows its aggressive strategy for the Indian two wheeler market and to compete for the number one spot with its former partner, Hero MotoCorp. Honda Motorcycle and Scooter India (HMSI), which is Honda’s Indian two-wheeler branch, plans on increasing the number of workers by 4000 in its third plant in Karnataka. Given the future strategy, the company would launch new models and work on lowering the cost of products by increasing the localisation levels.
HMSI President and CEO, Keita Muramatsu said that the third plant in Karnataka would churn out four million units by FY 2013-14, which will increase up to ten million units by FY 2019-20. On the other hand, Hero MotoCorp has already announced its intentions to have $10 billion turnover in the next five years with sales of 10 million units, out of which exports would be 10 per cent of the total sales. The company will employ up to 14,000 workers by next year across three facilities. Most of Honda’s R&D work today happens in Japan. So, to help reduce product development and sourcing costs, Honda opened a new Rs. 150 crore technical center at Manesar. Nationwide sales points will also be increased to 2000 by the end of 2013 from the current 1653 points (includes 572 dealers and rest of the sub-dealers).
Honda’s first bike for the mass market, the Dream Yuga, has been well accepted in the market. Volumes have crossed 1 lakh units between June and September. The fastest growing two-wheeler firm with strong successes such as the Activa scooter, Honda now expects to close this fiscal with a growth of 38% to 27.5 lakh units. Incidentally, rival Hero too has a target of reaching 9 million units annual output by next year and 10 million units in five years. Its current capacity is about 7 million units across the three plants in Gurgaon, Dharuhera and Haridwar. Two plants are coming up in Rajasthan and Gujarat.