Honda is increasing the production capacity of its Activa scooter to 2 lakh units a month in order to cope up with demand ahead of the upcoming festive season.
Honda Motorcycle and Scooter India (HMSI) is increasing production of its best-selling two-wheeler, the Activa, in order to cope up with the demand ahead of this festive season. The scooter has met sales targets for the company in the past and is now facing excess demand. Honda plans to ramp up the production capacity at its Bengaluru plant to nearly 2 lakh units a month to address this situation. It had already increased its production capacity by 15-20 percent in the first quarter of this ongoing fiscal for its scooters. The Japanese bike manufacturer saw a 30 percent rise in footfalls and enquiries from April to July this year and a 33 percent growth in sales during the same time period.
Honda reported that its scooter sales increased by 60.45 percent to 2,23,665 units from 1,39,392 units sold in July 2013. It also grew in total sales by over 32 percent in July this year at 3,81,411 units including motorcycle sales that have reportedly improved by 6.83 percent to 1,57,746 units. The company still has about 60,000 pending orders out of which 70 percent orders are for the Activa scooter. The Activa has been a consistent performer for Honda and it hit a high last month when it overtook Hero MotoCorp’s Splendor convincingly at 1,91,883 units as against the Splendor’s 1,65,779 units to become the number one two-wheeler model sold in India for that month.
Honda currently has 3 plants in India located in Gurgaon, Alwar (Rajasthan) and Bengaluru. The Narsapura plant in Bengaluru is mainly responsible for the production of the Activa scooter. The annual production capacity of this plant is 1.8 million units and the company plans to further expand it to 2.4 million units by the end of 2016. Honda wants to strengthen on its ‘Make in India’ resolve and steadily aims at creating 39 percent additional capacity within the next 3.5 years.
The company is also coming up with a new plant at Vithalapur, Gujarat with an annual capacity of 1.2 million units which will become operational by the end of 2015. The new plant will employ 3000 people within two years of commercial production and is being built with an initial investment of Rs. 1100 crores.