India: Honda to lift production capacity as demand recovers

The third largest Japanese automaker, Honda Motor Co., has announced recently it would invest around 9.65 billion rupees ($154 million) to increase car and motorcycle production capacity in the country, as demand has started to grow.

Of the total, the motorcycle division will use around 5.85 billion rupees to expand a motorcycle factory located in the southern state of Karnataka. The local auto unit will have the rest, around 3.8 billion rupees, to spend on adding production capacity at a plant in Rajasthan in northern India, according to a Honda statement, adding that both expansion programs should be complete by 2016. Tokyo-based Honda is one of the fastest paced automakers in India, with deliveries jumping 44 percent in the past eleven months through February, thanks to increased demand for new introductions such as its Mobilio minivan and Amaze subcompact. Additionally, the company’s motorcycle sales have also surged 22 percent for the same timeframe, figures from the Society of Indian Automobile Manufacturers show.

Honda’s production capacity at the vehicle assembly plant in Rajasthan will be expanded by 60,000 units annually from 2016, “driven by strong sales momentum for its cars, India has emerged as a very important market for Honda and holds great potential for future growth as well,” commented the carmaker in the statement announcing the investment strategy. The motorcycle unit will expand the company’s third manufacturing facility in India, with total capacity for two-wheel vehicles growing to 6.4 million units annually by 2017.

Via Bloomberg

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