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Honda to triple capacity, spend Rs 3000 cr; wraps off Civic

Will set up separate firm that will deal in auto parts.

NEW DELHI: Honda Motor Co, the world’s second-largest carmaker by value, will triple car-making capacity in India by the end of the decade and invest Rs 3,000 crore to meet demand for its fuel-efficient cars.

It plans to double vehicle output in India to 100,000 a year by late 2007 and triple sales in the country to 150,000 units by 2010, president and CEO of Honda Motor Co, Takeo Fukui (pictured), said in New Delhi on Monday.

The expansion is just not limited to two- and four-wheelers, but also to its power products. Honda has also taken the first step in maximising synergy between the four different companies representing it in India.

In the two-wheeler segment, Honda is present through two separate companies - Honda Motorcycle & Scooter India (HMSI) and Hero Honda Motors. Honda Siel Cars India (HSCI) is the passenger car arm, and Honda Power Products India (HPPI) deals with generators and other power products.

Between HHMI and HMSI, there are three existing manufacturing plants for two-wheelers and one for cars.

The Japanese major now plans to add two more two-wheeler manufacturing sites and one for cars. It has also announced the setting up of a new components company, which will aim to synergise sourcing for all group companies in India.

The company will unveil the Civic sedan for sale in India on Tuesday. India is Asia’s fourth-biggest automobile market after Japan, China and South Korea.

“We are establishing a new company called Honda Motor India Pvt Ltd, which will deal in parts for the automobile (car business) to begin with. This will help us achieve greater synergy in Indian operations,” Fukui said.

The new company will be established this year and will be headed by Masahiro Takedagawa, the head of south-west Asia for Honda. Fukui said that there was no decision yet on whether the new company will also supply parts to the two-wheeler ventures or the power products business and if it will set up a manufacturing plant in the country.

Takedagawa said Honda is currently conducting a feasibility study for the small car project. He said talks are on with various states for setting up a second car plant.

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Honda to triple capacity, spend Rs 3000 cr; wraps off Civic
Japanese Import Car, New & Used Car, 2007