The company currently has a plant at Greater Noida in Uttar Pradesh, which has an annual capacity of 1.2 lakh units and is being expanded to 1.6 units by adding a third shift. However, with the company lining up three cars for next year - including the new City sedan that was globally premiered for the first time on Monday - the need for a new manufacturing location has set in.
"We are making engine and other parts at Tapukara and the car production will begin from next year," Hironori Kanayama, president and CEO of Honda Cars India, said. Honda's investment at the new plant stands at Rs 2,500 crore and this has an installed capacity of 1.2 lakh units annually.
The Tapukara plant, which was commissioned in 2008, had become a sort of a headache for Honda since it had to be kept idle due to the demand slump the company faced in India. The shift of the Indian car market towards diesel had hit Honda hard as it saw sales go down rapidly due to the absence of a diesel car and poor pricing strategy on many models.This decline was largely arrested this year after the company launched the entry-level Amaze sedan (based on the Brio compact's platform) that was Honda's first diesel offering in India. Honda now plans a flood of new cars, most sporting diesel engines.
The new-generation City will be the first to come, and this would sport 1.5-diesel engine, which is already doing service on the Amaze. Honda will also drive in a new multi-purpose vehicle and the new generation of the Jazz hatchback next year, and these would be followed up with a sports-utility vehicle that is likely to come in 2015.
The company hopes that this pus h in India, which is seen as a long-term growth market despite the current slump, will push its volumes in the coming years. Honda's India sales in the April-October, 2013 are up 63% at 70,831 units against 43,525 units in the same period last year.
Honda's top management has said emerging markets will lead its global charge in automobile sales as it aims to double volumes to six million units by 2017, 50% of this coming from emerging markets against the 25% now. "India and Indonesia are markets that will play a big role in the emerging markets," a senior company official said.
The company, which is seen as a premium maker in the market, has said that it wants a bigger pie of the entry car market. It is studying the idea of getting in a low-price small car below the Brio compact that can see it take on models like Maruti Alto and Hyundai Eon. "We are studying the market... We need some time to make a decision on what needs to be done in this market. But we know that this market will be very stable, and will grow more," Kanayama had told TOI recently.
via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGr00v3GN2ZVL7w6oWlwexvDK2LlA&url=http://timesofindia.indiatimes.com/business/india-business/With-new-models-in-queue-Honda-steps-on-the-gas/articleshow/26383102.cms
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