Honda Siel to consider new plant

Honda Siel Cars India (HSCI), an arm of Honda Motor Corporation, Japan, is exploring the possibility of adding a new plant to boost capacity. The company plans to launch a small car before next Diwali.

HSCI, the third-largest Japanese automotive brand in India after Suzuki and Toyota Kirloskar, is gearing up to launch the car at the 27th Thailand International Motor Expo 2010, starting November 30. It had showcased the concept car at this year's Delhi Auto Expo.

The small car will be priced below Rs 5 lakh and have two versions. HSCI will promote the car on the basis of its fuel efficiency. HSCI is capable of expanding the capacity of its Noida plant to 100,000 units a year from 60,000.

But Tatsuya Natsume, director (marketing) of HSCI, said, "We have some limited room to expand after hitting 100,000 units a year." He added, "We will take a decision on whether to add capacity at the existing plant or set up a new plant after looking at the response for the small car."

Maruti Swift, widely considered as the benchmark product in the premium compact category, sales around 10,000-12,000 units per month. New compact cars from HSCI and Toyota are expected to compete with the Swift.