India becomes Honda's largest two-wheeler production hub

Honda Motorcycle & Scooter India (HMSI), India’s second largest two-wheeler manufacturer and the largest in the booming scooter segment, today inaugurated the fourth assembly line at its two-wheeler plant at Narsapura, near Bangalore.

The fourth assembly line will add another batch of annual production capacity of 600,000 units (0.6 million units), thereby totaling up the plant capacity to 2.4 million units now. HMSI’s total annual production capacity, which was 5.8 million units so far, now stands at 6.4 million units per year. According to the company, this makes India the largest production base for Honda’s two-wheeler business worldwide.

Present at the line inauguration at Honda’s third plant in Karnataka were Shinji Aoyama, chief officer - Asia and Oceania Regional Operations, Honda Motor Company), Minoru Kato, President & CEO, HMSI and the senior management officials from Honda. 

R-L: Minoru Kato, president and CEO, HMSI; Shinji Aoyama, chief officer, Regional Operations (Asia and Oceania), Honda Motor Co; Y S Guleria, senior VP (Sales and Marketing), HMSI and Vinay Dhingra, vice-president, Narsapura Plant, HMSI.

India leads demand for Honda  
Elaborating how Asia Oceania region contributes 60 percent to Honda’s global two-wheeler, automotive and power product sales and how India is driving the growth, Aoyama, who has headed the Indian operations in one of his previous stints, said, “Honda’s two-wheeler business spans more than 120 countries worldwide and India is leading the demand. In 2016-17, India alone contributed 28 percent to Honda’s global two-wheeler sales and became the top contributor to Honda’s two-wheeler business. The growing Indian two-wheeler market is top priority for Honda. To better meet dynamic market demand and to prepare for the future opportunities, today Honda has inaugurated the fourth assembly line in the Karnataka plant. With this, the Narsapura plant will now produce 24 lakh two-wheelers annually. This makes the Narsapura the world’s largest two-wheeler plant for Honda and also India the No. 1 production base for Honda globally.”

Detailing Honda’s growth trajectory in India and the trend of increasing demand for automatic scooters in Indian market, HMSI’s top boss Kato said, “In the first quarter of FY 2017-18, HMSI’s aggressive growth led the industry momentum. Growing at double the speed of industry at 19 percent, Honda alone contributed 68 percent to industry’s new volumes resulting in 3 percent market share gain to ever highest of 30 percent. While expanding leadership in scooter segment (59 percent market share), Honda is now also the new No. 2 motorcycle brand of India. The latest expansion further fortifies Honda’s ability to serve the market faster with its increased annual production capacity to 6.4 million units from all plants. In the long term, Honda 2Wheelers India’s steady and strategic investments will power our dreams to make India the export hub worldwide.”

Bangalore plant expansion was due
It can be recalled that Autocar Professional was the first media publication to report (on June 29 last year) on Honda’s plan to expand the capacity at its Bangalore plant after hitting peak production at its scooter-only facility in Gujarat.

“We are already under preparation to boost production capacity at our Bangalore plant simultaneously. We have additional land at that site where we can expand operations. We have laid out plans for levelling, construction, building and have started work there. However, we haven’t taken a decision on commencing operations. That will depend on how the market behaves during and after the festive season later this year (2016),” Y S Guleria, senior vice- president, marketing and sales, HMSI had told this publication on the sidelines of the inauguration of its second assembly line in Gujarat plant on June 29, 2016.

Later, Autocar Professional broke news about Honda achieving peak production capacity in a record six months of the commencement of operations at its Gujarat plant on September 2, 2016.

Notably, HMSI’s Gujarat plant, its fourth facility in India, had started production in February 2016 on the first assembly line (600,000 units). The second assembly line (adding another batch of 600,000 units) started operations on June 29 and in August 2016, the scooter-only facility had peaked its capacity of 1.2 million units.

This development had occurred two-months in advance to the original forecasts by HMSI’s top management.

“This possibly becomes the only specialised scooter manufacturing unit of its scale in the world to have reached peak capacity so fast. It is also a pointer to the remarkable pace of scooterisation in India,” the report by Autocar Professional had quoted.

Investment and employment
According to the company, together with its 26 suppliers who have also set up their respective ancillary units around Narsapura, invetsment in the region under the HMSI project totals more than Rs 5,400 crore.

“This has generated employment for nearly 22,000 people in the Karnataka state,” a company document claims.

While Honda’s Narsapura plant employs 7,000 associates with investment of Rs 2,600 crore, its 26 associated suppliers have made additional investment of Rs 2,800 crore and have created around 15,000 additional job opportunities at their plants, the company claims.