Honda to invest Rs 965 crore in India to expand motorcycle, car production

Honda Motor Company, the Japanese automaker, said on Friday that it would invest Rs 965 crore (US $154 million) to expand its motorcycle and automobile production in India, targeting growing demand in domestic market.

Honda said its unit, Honda Motorcycle & Scooter India (HMSI), would spend Rs 585 crore, to raise annual production capacity by a third to 2.4 million units at its factory in the Narasapura area of Karnataka. The move is expected to create about 1,900 jobs.

"Combined with the additional capacity of upcoming 4th plant (in Gujarat), which is scheduled to become operational in the first half of 2016, this expansion will increase HMSI's overall annual production capacity to 64 lakh units," the company said in a statement.

HMSI President & CEO Keita Muramatsu said, "Honda is strengthening its 'Make in India' resolve through steady and strategic investments with a long-term objective of creating 39 per cent additional capacity within 3.5 years."

Meanwhile, the Japanese company's automobile unit, Honda Cars India, will invest Rs 380 crore to raise capacity by 50 per cent to 180,000 units a year at its Rajasthan factory. The carmaker will hire an additional 600 workers.

With robust response to its models, including sedans City and Amaze, Honda has witnessed 44 per cent growth in its domestic sales during April 2014 to February 2015 at 1,66,366 units as against 1,15,913 units in the corresponding period in FY14.

The moves will help increase Honda's overall annual production capacity in the country to 6.4 million motorbikes and 300,000 automobiles, the company said in a statement on its website.