Honda intends to increase production, wish to set-up second plant

Honda Motorcycle & Scooter India (HMSI) intends to increase its production capacity with estiblishing a new plant in India for which location is yet to be finilised. So far, the company has announced to invest around Rs 400 crore to set-up the new plant. The company's present plant, Manesher in Haryana, is believed to reach 100 per cent capacity usage by 2010-11. Currently, the two-wheeler maker rolls out its bikes from Rs. 1,300 crore manufacturing facility at Manesar. HMSI Operating Head (Finance & Accounts) Sushil K Kabra said," We are working on internal study on the second plant, which is possible to come up on 50 acres. The second plant is believed to produce its newly launched 110cc Honda CB Twister. Honda Motors is expecting to sell 1.25 million vehicles this fiscal year and next year figure also will be expected to rise to 1.5 million, against last year, company sold about 1.07 million units. Naresh Kumar Rattan, marketing and sales head said, "We cannot let our sales stagnate, we will take a decision soon. Currently, the company commands a strong market share of 13 per cent in India. The major share of the market is associating with the parent company Hero Honda, which expects to see its sales overgrow 4 million units in year of 2010. In last December, Honda Motor made its entry into the popular 110cc bike segment, taking on Hero Honda. HMSI aims to grow sales up to 20 per cent on the back of the 110cc Honda CB Twister, its first made bike in the category which will take on Bajaj's Auto Discover DTSi and Hero Honda's Passion and splendour respectively.