Honda plans expansion of India operations

[abraham]

Wednesday, May 17, 2006 (New Delhi):

Honda Siel Cars India Ltd has sold almost 1 lakh 60 thousand cars in India so far but going forward the company wants to sell at least one lakh per year.

This is what the Honda President & CEO Takeo Fukui said in Tokyo on Wednesday when he announced a major expansion of the Indian plant.

The popular City has helped Honda achieve a growth of 14 per cent in FY-06 at 42,727 units. This was also because the Japanese company had completed the expansion of its capacity from 30,000 to 50,000 units in December last year.

Expansion planned

But now Honda wants more. And seeing the response to its products off late coupled with the imminent Civic launch now Honda has said it will once again undertake an expansion which will be onstream by the end of 2007.

But unlike last time there would be no new buildings involved. Instead there would be new machines added to the existing lines and there would be more shifts per line.

This will take the Honda capacity to 100,000 units at a total investment of Rs 200 crore. And the company is not ruling out further expansions after that in the short term. Honda will invest another Rs 200 crores on model upgrades and new models over the next one year.

Now all energies at Honda are being focussed on the Civic sedan which will debut next month. After that an upgrade on the Accord is expected and we could see a hatch based on the City driving in next.