HMSI planning 4th mfg plant, looking for a suitable location

Country's second largest two-wheeler maker Honda Motorcycle & Scooter India on Wednesday said it is looking for a suitable location to set up its fourth manufacturing facility to ramp up production.

"We are looking for a new site. We are studying various options and talking to different states," Honda Motorcycle & Scooter India (HMSI) Vice-President (Sales and Marketing) Y S Guleria told PTI.

The company, which is a wholly-owned subsidiary of the Japanese auto giant Honda, is exploring possibilities across the country for setting up its fourth plant, he added.

Guleria, however, said the company has not yet finalised any location to set up the new facility.

"Once our study is complete, only then we will announce something," he said. He declined to comment how long the feasibility study will take.

HMSI is investing Rs 1,500 crore (Rs 15 billion) in setting up of its third plant in Karnataka, which will take the company's total production capacity to 40 lakh (4 million) units a year.

The company has two facilities at Manesar in Haryana and Tapukara in Rajasthan with an annual output of 16 lakh (1.6 million) units and 12 lakh (1.2 million) units respectively.

"Our third plant will be operational by the end of May this year. Once we start production there, we will see how we can expand the production of our existing plants," HMSI President and CEO Keita Muramatsu

said.

Last month, Honda Motor Co Operating Officer Shinji Aoyama had said HMSI can become the number one two-wheeler maker in India by 2015-16 if the current market slowdown prolonged, much ahead of its earlier target of becoming the numero uno two-wheeler maker in India by 2020.

HMSI's parent Honda Motor Company has been undertaking an aggressive strategy to increase its market share in the two-wheeler segment in India and challenge the number one position of erstwhile partner Hero with plans to produce 10 million units by 2019-20 that may entail the company having up to eight plants in India.

During 2012-13, HMSI became the second largest two-wheeler maker in India by volumes overtaking homegrown rival Bajaj Auto.

HMSI has charted out strategy to accelerate the rate of new model launches, while lowering prices of the products by increasing localisation levels.

The company today launched a new motorcycle 'Dream Neo' in the volume-driven commuter segment, priced at Rs 43,150 (ex-showroom, Delhi), making it the firm's cheapest two-wheeler in the country.

For the ongoing 2013-14 fiscal, HMSI has set a target of increasing its sales by 42.7 per cent to 39.3 lakh (3.9 million) units, including exports, on the back of new product launches and fresh production capacities coming in.

In terms of sales, India is the fastest growing market for Honda and accounts for around 18 per cent of its total global sales in two-wheeler segment and it is aiming to raise it to 25 per cent by 2016.