Honda to put Rs. 585 cr into 2-wheeler plant

India's secondlargest two-wheeler manufacturer, Honda Motorcycle and Scooter India (HMSI), on Friday announced an additional investment of ₹ 585 crore at its third factory at Narsapur, Karnataka, to expand its capacity by 600,000 units per annum.

This expansion will take the company's capacity in the state to 2.4 million units per annum by the end of 2016, making India its biggest two-wheeler market worldwide.

This will also narrow the gap with erstwhile partner and arch rival Hero MotoCorp. Overhauling Hero as India and world's largest two-wheeler manufacturer has been one of Honda's prime targets since parting ways with the Indian firm in late 2010.

"Combined with the additional capacity of the 4th plant (Gujarat, 1.2 million units per annum), which is scheduled to become operational in the first half of 2016, this expansion will increase HMSI's overall annual capacity to 6.4 million units," said a statement from Honda Motor Corp in Japan. "With this capacity expansion, HMSI will be well prepared to continue serving the motorcycle market in India where further growth is expected."

"We are strengthening our 'Make in India' resolve through steady and strategic investments with a long term objective of creating 39% additional capacity within 3.5 years," said Keita Muramatsu, president and CEO, HMSI. "We are planning to increase the number of associates in the plant by approximately 1,900. This investment will provide new opportunities for expansion of brand Honda in the largest two-wheeler market of the world."

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