Honda to expand capacity at its two-wheelr and car plants in India

Eyeing speedier growth in the Indian market, Honda’s two-wheeler and passenger car arms – Honda Motorcycle & Scooter India (HMSI) and Honda Cars India – are both looking to expand their production capacities. While HMSI will expand its third motorcycle plant, HCIL will increase capacity at its second plant, both currently under operation.

HMSI’s third plant, at Narsapura in Karnataka, went into operation in June 2013, with annual production capacity of 1.8 million units. HMSI will now invest around Rs 585 crore to build another production line within the existing site. The new production line is slated to go on stream in 2016 and will expand capacity by 600,000 units, increasing the plant’s total annual production capacity to 2.4 million units. To accommodate this expansion, HMSI plans to increase its workforce by 1,900.

In 2014, domestic two-wheeler sales in India increased to 16 million units, a year-on-year increase of around 10%. In the same year, Honda motorcycle sales increased to 4.2 million units, a year-on-year increase of 30%.

Combined with the additional capacity from the fourth plant which is scheduled to be operational in the first half of 2016, the expansion at the Narasapura plant will increase HMSI’s overall annual production capacity to 6.4 million units.

Commenting on the new investment, Keita Muramatsu, president and CEO, HMSI, said: “Honda is strengthening its ‘Make in India’ resolve through steady and strategic investments with a long term objective of creating 39% additional capacity within 3.5 years.”

Passenger car capacity to go up by 60,000 units
HCIL’s second plant, at Tapukara in Alwar, Rajasthan which began manufacturing in February 2014 with a production capacity of 120,000 units, is to see an investment of Rs 380 crore to set up an extended assembly line.

This expansion, for 60,000 units new capacity, will be undertaken in 2016, thereby increasing the plant’s total production capacity to 180,000 units. The company says it will employ another 600 workers to handle the expanded operation.

With the increased capacity, the Tapukara and Greater Noida plants, which currently have 120,000 units capacity each, will augment Honda’s overall car production capacity to 300,000 units per annum.

HCIL’s plant in Tapukara integrates facilities with various functions including operations for forging, casting, stamping, powertrain components production, welding, painting, resin moulding, engine assembly, and frame assembly as well as an engine testing facility.