Honda Motorcycle and Scooter India (HMSI), which is looking to ramp up production from its current annual capacity of 2.2 million to 4 million vehicles by mid-2013, on Thursday, laid the foundation stone for its third plant in the country at the Narasapura Industrial Area in Kolar district near here. The Rs.1,350-crore plant with an annual capacity of 1.2 million vehicles is not only expected to cut down waiting period of its popular models, but would also enable it to reach out to the Southern markets, which contribute to 30 per cent of the overall sales in the country far more quicker than at present.

Karnataka Chief Minister D. V. Sadananda Gowda laid the foundation stone to the plant. The Narasapura plant, expected to provide employment to about 3,000 people, will attract more investments and employment generation from the ancillary units. Other two plants of HMSI are located at Manesar (1.6 million vehicles) in Haryana and Tapukara (1.2 million) in Rajasthan. HMSI, which sold 1.6 million vehicles last fiscal, has set a sales target of 2.10 million vehicles this fiscal.

“It (Narasapura plant) is a significant milestone for our global business. India is a priority market for Honda,” said Takashi Nagai, Chief Operating Officer of Honda Asia West operations and President and Chief Executive Officer of Honda Siel Cars India (HSCI). The third plant would allow the company to cover more areas effectively, he added.

On the new launches, President and Chief Executive Officer of HMSI Keita Muramtsu told presspersons later that the company planned to launch three to four new models in the scooter and motorcycle segments next year. There were no plans yet to start manufacturing of fun bikes (in the 1,000 cc plus category) in India, Mr. Muramtsu said and added that the cost of importing them remained high due to high import duty. HMSI sold about 100 fun bikes a year, he said. According to HMSI Vice-President (Sales and Marketing) Naresh Kumar Rattan, the company is expecting to bring the waiting period for popular models such as Activa, Dio and Unicorn from the current average three months to less than a month once the Narasapura plant becomes operational.

Meanwhile, the prices of popular two-wheeler models from the HMSI stable could see a rise in the light of increasing input cost. “The material cost has gone up by 15 per cent in the last one year. There could be a price increase,” Mr. Keita Muramtsu said. Models like Activa and Dio in the scooter segment and Unicorn in the motorcycle segment are popular among the customers.

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