Honda aims to build five to six more two-wheeler manufacturing facilities in India by 2019-20, raising its annual production capacity by over three-and-half times to 10 million units. The aim is to be the leader in the second-largest two-wheeler market globally, displacing erstwhile partner Hero MotoCorp.
The new plants could take the total number of facilities in the country to seven-eight by the same period, Keita Muramatsu, president and CEO, Honda Motorcycle and Scooter India (HMSI), said. At present, it has a 2.8 million unit annual output across five production lines in two facilities at Manesar and Tapukara.
Production will go up to 4 million units when a third facility opens in Karnataka in the first half of 2013, where further expansion will eventually take capacity to 4.6 million units. The company will employ up to 14,000 workers by next year across the three facilities.
?As part of our strategy, we are looking to touch a 10 million unit output by 2019-20, but we are yet to work on where the other plants will be located. This is probably the most important market for us going forward and we want to be the leader. We will need about seven-eight plants to reach this,? Muramatsu said. This is based on the calculation that one production line makes about 6 lakh units a year and one facility has two-three lines. According to sources the fourth plant may be located in Gujarat.
Most of Honda?s R&D work today happens in Japan. So, to help reduce product development and sourcing costs, Honda opened a new R150-crore technical centre at Manesar. Nationwide sales points are also being taken up to 2,000 by end 2013 fiscal from 1,653 today (includes 572 dealer and rest are sub-dealers).
Honda?s first bike for the mass market, the DreamYuga, has been well accepted in the market ? volumes have crossed 1 lakh units between June and September. The fastest growing two-wheeler firm with strong successes such as the Activa scooter, Honda now expects to close this fiscal with a growth of 38% to 27.5 lakh units.
?The festival season seems to be giving good signs. On the first day of Navratras (October 16), we sold 25,000 units. Inventories are not really very high. We have stocks for only two weeks,? Yadvinder S Guleria, vice-president (sales & marketing), HMSI, said.
Incidentally, rival Hero, too, has a target of reaching 9 million unit annual output by next year and 10 million unit in five years. Its current capacity is about 7 million units across three plants in Gurgaon, Dharuhera and Haridwar. Two plants are coming up in Rajasthan and Gujarat.
