Honda new ‘only scooter’ plant in Vithalapur (Gujarat) will commence production in the first quarter of 2016. It required an investment of Rs. 1100 crores and is all set to become the world’s largest scooter manufacturing plant.
Honda is betting big on the scooter segment in India and has just announced that they will be setting up a separate manufacturing facility in Vithalapur, Mandal taluka just for the production of scooters. Development and construction of the plant is on schedule and the factory will be fully operational by the last quarter of the current financial year (early 2016). The factory’s foundation event took place last year and since then, Honda has invested Rs. 1100 crores for developing what will soon become the largest scooter manufacturing facility in the world.
At present, Honda enjoys a two-wheeler market share of 26 percent in India, accounting for 59 percent of the overall scooter sales in the country. The new plant is spread across an area of 250 acres and will manufacture 12 lakh units per annum. This factory will become the first two-wheeler production unit in the state of Gujarat and operations will begin in two phases. The first assembly line with a capacity of 6 lakh units will commence three months prior to the second assembly line, having the same annual capacity. The upcoming facility will reportedly hire around 3000 people within the first two years.
Last year, the Japanese manufacturer experienced a growth of 20 percent in the scooter segment as against the overall segment growth of just 7 percent. With demand for two-wheelers in India growing by 10 percent next year, Honda is hoping to make things better in order to get most number of sales as possible. For the new plant, the company will be locally sourcing 97 percent of all raw materials thanks to 22 vendors and suppliers who will be setting up their base camps close to the manufacturing plant by collectively investing around Rs. 900 crores.