Honda wants to make India its global leader for manufacturing motorcycles, scooters and sportsbikes by investing loads of money to expand their existing factories in the country.
Many companies in the automobile industry have planned to set up manufacturing plants in the country in line with the ‘Make-in-India’ campaign of the government of India. This is slowly making India the hub for different car and two-wheeler manufacturers all over the world.
Honda’s two-wheeler division has been witnessing a good growth trend in India and the country is now the second biggest market for the Japanese manufacturer in the world, accounting for about a quarter of its global two-wheeler sales. The Indian market is second only to Indonesia for the company. However, India has the fastest growth rate posting a 20 percent increase in sales at 4.45 million units at the end of the last fiscal on 31st March 2015.
Honda is now looking further and is wanting to increase production capacity by almost 40 percent by investing Rs. 1775 crores over the next two years in India. The company is planning to sell 4.7 million units in this fiscal year and feels that the investment will help it reach their targets. The manufacturer will be able to produce 6.4 million scooters and motorcycles every year by the end of 2016, from the current 4.6 million vehicles that they sell now.
Honda wants India to become their largest subsidiary and feels that it will not be very difficult as they have been growing constantly. The only obstacle has been the restricted production capacity of all their three plants, which are currently running on peak capacity. Their fourth factory which is expected to start production from early 2016 will become the world’s largest scooter facility.
Honda is also looking at making more investments to expand their Gujarat and Bengaluru factories to manufacture new models in addition to the current ones. Currently, the Bengaluru factory can produce 1.8 million vehicles, which in future will increase to 2.4 million. Their main competitor in India is their former partner and market leader Hero, which sold about 6.43 million units in the last fiscal.
From the products point of view, Honda will be bringing nine new models to India this year including bikes, scooters and sportsbikes. One of the upcoming performance bikes is the CBR650F, which they will be assembling at its Manesar plant in Haryana.
