Honda Motorcycle to invest Rs 8 billion, plans to set up fifth plant

Honda's Africa Twin motorcycle
Japanese two-wheeler major Honda Motorcycle and Scooter India (HMSI), the second-biggest player in the domestic market, will invest Rs 8 billion to launch new products and improve efficiency at existing production facilities.

The company also plans to set up its fifth plant in the world’s biggest two-wheeler market.

Honda has four plants in India with a combined production capacity of 6.4 million units a year. The country happens to be the biggest market for the Japanese auto major and contributes one-third of its global volumes. HMSI is confident that the current production capacities will suffice till 2020. “But after 2020 we can add production capacity,” said Minoru Kato, president and chief executive officer, HSMI. “But it is still under consideration,” he added.

“It is the responsibility of the global headquarter to allocate capacity...we would like to raise our hand (for more capacity),” he said.

HSMI expanded its India sales by over 22 per cent to 5.77 million units in 2017-18, higher than the industry growth of 15 per cent. 

It produced a total of 6.1 million vehicles, of which 348,590 units were exported. Hero, the biggest player, sold 7.38 million units in the domestic market, growing at 14 per cent in 2017-18.

The company plans to launch a new model and upgrade 18 existing ones in 2018-19.

“India is always the number one contributor to Honda’s two-wheeler business... Moving ahead with the same momentum on the back of customer demand, we will invest close to Rs 8 billion as we aim for double-digit growth for the third consecutive year in a row as well,” Kato said.