Honda Unveils their Expansion Plans – Wants to Double its Production Capacity with a New Plant

Greetings! There is hardly any day when one doesn’t get to hear news either involving Hero or Honda. Well, after the break up of the ever successful joint venture between the two giants Hero and Honda, the latter i.e. Honda has become aggressive in its plans. Not many days have passed when Honda was luring all the Hero Honda dealers to join their brigade and now the company has laid out their ever aggressive and futuristic expansion plans for India.

Honda is planning to increase the production capacity by starting the phase 2 of expansion at Tapukara plant in Rajasthan much before its schedule.

Secondly, Honda is planning to also set up a new third plant in the state of Karnataka (finalized). As far as the investment is concerned; Honda will probably invest around 15 billion in this whole expansion plan. The main reason that Honda is planning to pursue this extensive expansion plans is because it wants to take advantage of the rapid rising demand in Asian markets especially the south Asian markets. HMSI has rapidly covered up things by taking aggressive steps after its exit from the joint venture with Hero Honda which is a great thing as far as the future of HMSI is concerned.

Honda said that it’s wholly owned Indian subsidiary HMSI will double capacity at their factory in Tapukara, Rajasthan. HMSI’s Tapukara plant is supposed to roll out 6 lakhs vehicles per annum. The company is now looking to double the production capacity in that plant to 12lakh vehicles per annum by March 2012. Though the company did not disclose the investment involved in the project; an executive with direct knowledge, on a condition of anonymity, said that the company will spend around 5 billion for the Tapukara plant expansion and around 10 billion for establishing their new third plant in Karnataka.

The company’s new plant will be located in Bangalore; this will help Honda to serve the extensively growing demand of the Indian motorcycle industry. The operations for the third plant are reported to be commencing in the first half of 2013 with a capacity of 12 lakh units per annum. Honda has currently got two plants and with the plant at Bangalore the count will increase to three. The first plant is located in Manesar, Haryana which has a capacity of 16 lakhs; the second at Tapukara that will start its operations from June1 2011 and from which 12 lakh units till March 2012 are expected; the third will be at Bangalore with a capacity of 12 lakhs. A company statement said that this production expansion plan will result in total production of 4 million units (40lakh) which will help the company serve better and meet the demands of their consumers. Lastly a company official said that Honda chose Bangalore as South India is a very important market for them and also the presence of ports will ease exports. All in all, the production expansion plans of HMSI are crafted out fantastically but we will have to see if they are implemented properly by the company or not.