Honda inaugurates new plant in Karnataka, expands capacity to 4 million units

Bangalore, May 28, 2013: Honda Motorcycle & Scooter India (HMSI) has inaugurated its third manufacturing plant in India at Narsapura Area in the Kolar district of Karnataka and 52km from Bangalore.

Present at the inauguration ceremony were Yoshiyuki Matsumoto, managing officer, Honda Motor Co and Representative of development, purchasing and manufacturing, Asia Oceania Region; Keita Muramatsu, president and CEO, HMSI; Yadvinder Singh Guleria, vice-president (sales & marketing), HMSI; and Mr Muniyappa, Union Minister of State for Medium & Small Scale Industry, government of India.

Starting operations from June 2013, the state-of-the-art plant has a manufacturing capacity of 12 lakh units in Phase 1. An additional increase of 600,000 units in Phase 2 will augment the new plant’s total capacity to 18 lakh by the end of 2013-14. As a result, HMSI’s cumulative annual capacity from three plants will stand increased by 64 percent to 4.6 million units per annum.



The Karnataka plant, spread across 96 acres, is claimed to be Honda’s most environmentally responsible plant. It proactively reduces energy consumption during production. Honda says it has been successful in meeting over 30 percent of its annual water demand with an internal rain harvesting system. The facility also has zero liquid discharge. To make this unit a manufacturing benchmark, HMSI has employed more advanced machining automation, a high speed transfer line, and robotic welding and painting of frame parts.

Aiming for big numbers
The all-new Karnataka plant is expected to fast bridge the demand-supply gap for some of HMSI’s popular products. Elaborating on the company’s plans, CEO Keita Muramatsu said, “With the inauguration of our third plant which is 2,200km from our two existing plants in North India, Honda aims to deliver high quality and advanced two-wheeler products to customers faster in South India. The expanded production capacity will be further supported by aggressive growth in network to 2,500 outlets and rapid product introduction as we aim for market leadership.” Yadvinder Singh Guleria, VP (sales & marketing), added, “We shall start mass production of the Dream Yuga at this plant from June 2013. The Activa scooter will be produced on the second line.”

Gunning for speedy growth
HMSI, which has made known its ambition to be the No. 1 player in the Indian two-wheeler market by 2016, is aggressively driving its growth programme in India. Earlier this year, it opened the state-of-the-art Honda Technical Centre at Manesar that will facilitate development of vehicles and parts from scratch. With local development, customers will benefit from a low price and increased mileage from the newly introduced Honda Eco Technology (HET). Since then, HET has gone on the trio of scooters (Activa, Aviator and Dio) and the recently launched Dream Neo. To be in tandem with future growth plans, HMSI is also strengthening its dealer network. It plans to add another 500 sales and service outlets to the existing 2,000 touch-points this fiscal with the focus on products that will appeal to the masses. The current localisation level of its models is close to 100 percent with 200 suppliers providing the parts locally.

On the sales front, while the ongoing downturn has somewhat dimmed numbers for most two-wheeler manufacturers, HMSI is notching good numbers. In the first month of the new fiscal year (2013-14), the company recorded sales of 259,560 units (including exports), up by an impressive 30.54 percent (April 2012: 198,831 units). It sold 123,240 motorcycles (up by 51 percent over April 2012: 81,427 units) and 136,320 scooters (up by 16 percent over April 2012: 117,404 units) during April 2013, scoring the highest ever monthly sales. Last month it also launched the lowest-priced motorcycle, Dream Neo, for Rs 43,150 (ex-showroom, Delhi). As per SIAM industry data, HMSI currently has an overall market share of 21.34 percent. Hero MotoCorp leads the two-wheeler sector with 41.80 percent market share, while Bajaj Auto has 17.11 percent and TVS Motor Co has 12.22 percent.

KARTHIK H

Photograph (L-R): Keita Muramatsu, president and CEO, HMSI and Mr Muniyappa, Union Minister of State for Medium and Small Scale Industries, at the plant inauguration.