Panaji :Country’s second largest two-wheeler player Honda Motorcycle and Scooter India (HMSI) is advancing the commissioning of its fourth plant with 1.2-million capacity near Ahmedabad by two months to January-end to meet rising demand for its scooters.
“Our existing three plants are running at 100 per cent capacity as demand is rising faster than what we can offer. We still have around six-month waiting period for Activa.
“So we will be commissioning the Rs 1,100-crore scooters-only plant in Gujarat by the end of next month instead of the earlier plan of end-March,” HMSI President and Chief Executive Keita Muramatsu told PTI on the sidelines of launching the country’s first BS-IV-compliant biking model CB Hornet 160R here.
“This scooters-only plant at Vithalapur near Ahmedabad is the world’s largest plant for any scooter maker,” Muramatsu said, adding this will take the company’s overall capacity to 5.8 million from the present 4.6 million.
HMSI started operations in 2001 with its first 1.65 million units plant at Manesar in Haryana. In 2011, it launched the second plant at Tapukara in Rajasthan with 1.2 million units capacity. It again ramped up production by investing in a third plant at Narsapura in Karnataka in 2013 with 1.8 million units of capacity, making it Honda’s largest two-wheeler plant in the world.
All three plants are currently running on full capacity and it still has a six-months booking period for Activa brand of scooters, which is it bread-and-butter brand, HMSI Senior Vice President – Sales and Marketing, Yadvinder Singh Guleria said.
He added that as demand grows, the company will have to look for another greenfield plant as only the Karnataka factory has land available for brownfield expansion.
When asked if it will follow carmakers like Maruti, Toyota and GM in increasing prices to the tune of 3 per cent, the company said it has no plans because it can still absorb the marginal increase in input cost following the depreciation of the rupee, as it still imports some electrical parts. On an average, the company sources 90 per cent of its parts locally, Guleria said.
Muramatsu said by the next year, India will be the largest market for its parent Honda globally. Currently, with 4.65 million units, Indonesia is the largest market, while the Indian market is worth 4.60 million units now.