Honda Motorcycle & Scooter India (HMSI) today confirmed Autocar Professional's news-breaking news of April 9, 2018 that the Japanese two-wheeler major would be adding a third assembly line at its Gujarat plant.
Earlier today, HMSI announced plans to expand the annual production capacity of its fourth two-wheeler production plant in Gujarat. Located at Vithalapur area, near Ahmedabad, and inaugurated in February 2016 with a production capacity of 0.6 million units initially, the factory was expanded to 1.2 million capacity in June 2016.
Honda had started production at its Gujarat plant in February 2016 with its first assembly line (annual capacity: 600,000 units). The second assembly line (adding another batch of 600,000 units) had started operations on June 29, 2016 and in August 2016, the scooter-only facility had peaked its capacity of 1.2 million units.
Now, HMSI is to additionally invest Rs 630 crore to build a new production line within the existing plant site. The new production line will add 0.6 million units and increase the total annual production capacity of the scooters-only facility at Vithalapur to 1.8 million units by the year 2020. This expansion will increase Honda 2Wheeler India’s overall annual production capacity to 7 million units by year 2020.
Elaborating on this plan, Minoru Kato, president and CEO, Honda Motorcycle & Scooter India, said, “Over the years, Honda has been investing and expanding its capacity in the world’s largest two-wheeler market. The additional capacity at our fourth factory reinforces our commitment to serve our customers faster.”
The management at HMSI is understood to have been evaluating the possibility of installing a third assembly line at its scooters-only plant in Gujarat for at least 8-10 months now. Top officials at the two-wheeler major, which continues to face production capacity constraints, forecast a potential slowdown in the domestic demand post the implementation of the BS VI norms in April 2020.
As a result, the company is understood to be working on a conservative and reliable production strategy that entails holding investments for its fifth manufacturing plant in India until it sees recovery in the domestic demand post April 2020.
Meanwhile, the third assembly line at the Gujarat plant is understood to provide the necessary additional capacity to continue growing in the domestic as well as the export markets.
Also read: Top 10 scooters in India in August 2018
HMSI'S MANUFACTURING CAPACITY IN INDIA