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Honda to Expand Motorcycle and Automobile Production Capacity in India 27 March 2015

Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), Honda’s motorcycle production and sales subsidiary in India, and Honda Cars India Limited (HCIL), Honda’s automobile production and sales subsidiary in India, have each decided to expand annual production capacity in line with the expected continued future growth of the Indian market. HMSI will expand its 3rd motorcycle production plant, and HCIL will expand its 2nd automobile production plant, both currently under operation.

 

HMSI’s 3rd motorcycle production plant, located in the Narsapura area in the state of Karnataka in the southern part of India, became operational in June 2013, with annual production capacity of 1.8 million units. HMSI will newly invest approximately 5.85 billion rupee and build another production line within the existing site. The new production line is scheduled to become operational in 2016 and expand annual production capacity by 600,000 units, increasing the plant’s total annual production capacity to 2.4 million units. In order to accommodate this capacity expansion, HMSI is planning to increase the number of associates by approximately 1,900.

 

In 2014, industry-wide motorcycle sales in India increased approximately to 16 million units, a year-on-year increase of approximately 10%. In the same year, Honda motorcycle sales increased to approximately 4.2 million units, a year-on-year increase of approximately 30%. Combined with the additional capacity of the 4th plant which is scheduled to become operational in the first half of 2016, this expansion of the 3rd plant will increase HMSI’s overall annual production capacity to 6.4 million units. With this capacity expansion, which will make HMSI Honda’s largest motorcycle assembly plant in the world, HMSI will be well prepared to continue serving the motorcycle market in India where further growth is expected primarily with scooter products.

 

As for automobile business, HCIL’s 2nd automobile production plant, located in Tapukara Industrial Area, Dist. Alwar, in the state of Rajasthan in the northern part of India, became operational in February 2014, with annual production capacity of 120,000 units. HCIL will newly invest approximately 3.8 billion rupee to further strengthen the plant with facilities such as the extended assembly line. These measures will be taken in 2016 and expand the annual production capacity by 60,000 units, increasing the plan’s total annual production capacity to 180,000 units. In order to accommodate this capacity expansion, HCIL is planning to increase the number of associates by approximately 600.

 

In 2014, industry-wide passenger automobile sales in India increased to approximately 2.55 million units, a year-on-year increase of approximately 3%. In the last 10 years, the market has grown approximately 2.5 times, making India the world’s 6th largest automobile market when sales of commercial vehicles are included. In the midst of such market growth, Honda has been introducing all-new models such as the diesel-powered the City and the Mobilio and maintaining strong sales. In fact, cumulative sales of the Amaze quickly reached the 100,000-unit milestone in August 2014, only 16 months after the start of sales. In 2014, Honda’s automobile sales increased to approximately 180,000 units, a year-on-year increase of approximately 67%. This expansion of the 2nd plant will increase HCIL’s overall annual production capacity to 300,000 units including the 120,000-unit capacity of the 1st plant and will enable HCIL to continue accommodating the automobile market in India where further growth is expected primarily with small-sized passenger cars.

 

HCIL’s automobile production plant in Tapukara, integrates facilities with various functions including operations for forging, casting, stamping, powertrain components production, welding, painting, resin molding, engine assembly, and frame assembly as well as an engine testing facility. The plant has a layout with an optimized automation system and employs the latest equipment to pursuit efficient operation. From the perspective of high product quality and ergonomics, the production efficiency and safety of each operation performed at the plant is continuously being improved.