India has become the largest manufacturing base for Japanese auto major Honda's two-wheeler business, with four units that have a total installed capacity to churn out 6.4 million motorcycles and scooters annually.
Honda Motorcycle and Scooter India (HMSI), the local arm of the company, achieved the feat by expanding the capacity of its Narsapura plant on the outskirts of Bengaluru by an additional 0.6 million units, taking its total capacity up to 2.4 million units.
"Honda's two-wheeler business spans more than 120 countries worldwide and India is leading the demand. In 2016-17, India alone contributed 28% to Honda's global two-wheeler sales and became the number one contributor to Honda's two-wheeler business," said Shinji Aoyama, Chief Officer, Regional Operations (Asia & Oceania) at Honda Motor Co, in a statement.
The plant at Narsapura is now Honda's single largest manufacturing unit in terms of volume globally. It's fourth assembly line, which came at a cost of Rs 600 crore, will create a direct employment opportunity for 1,500 people, according to the company. So far, the plant has cost HMSI a total of Rs 2,600 crore and employs 7,000 people directly.
Apart from direct employment, the company says the expansion will allow its 26 suppliers in the state of Karnataka to create employment for 15,000 people. The expansion of the Narsapura plant was warranted to serve the growing demand for ungeared scooters in the country.
Honda claims it controlled 59 per cent of the scooter market in India in the quarter that ended June 2017. The company's share of the overall two-wheeler market in the country is now up to 30 per cent, and is growing at a pace of 19 per cent year-on-year.
"The latest expansion further fortifies Honda's ability to serve the market faster with its increased annual production capacity to 6.4 million units from all plants. In the long term, Honda Two Wheeler India's steady and strategic investments will power our dreams to make India the Export hub worldwide," said Minoru Kato, President and CEO at HMSI.