Honda Motorcycles has a good niche in the Indian two wheeler market, with its sale proving to be potential. However, the company does not want to take risk on making the delivery too far or extending the wait time. So the company is launching its second plant so that the growth rate may be stable at 22% during 2010-11. Honda, currently the fourth largest company in two wheeler making, has laid its foundation stone for the second plant at Tapukara, wherein the production will commence from the second half of 2011.
Honda Activa [images] scooter has a long wait period amidst the overall sale of 12.7 lakh units in 2009-10 and the target for this year is 15.5 lakh units. Honda much depends on the upcoming second plant to boost its sales, said its CEO and President. From the overall sale, in 2009-10, of 5.2 lakhs, scooters comprised 7.5 lakh units, making it 60% sales. The company seeks to evenly distribute the sale of both scooters and motorcycles, probably more from the latter. The new plant will come off in the existing car plant at Honda Siel’s 1000 acre area, and will have the capacity of 6 lakh annual units at the initial phase. Depending upon the demand, this will be doubled –to 12 lakh units- making the total tally of production to 22 lakh units(of which 6 lakh units may be from the smaller plants).
According to the MD and COO of Honda Asia and Oceania, the first plant has already became packed for full capacity and there is an urgent need for the second plant for India. For Honda, India is one of the crucial market for its automotive operations. The new plant has incurred an investment of Rs500 crore allied with the involvement of 3000 employees.