Honda Motorcycle to invest Rs 600 cr in Karnataka plant

New production line to be added to help the company double output of two-wheeler Navi

Honda Motorcycle & Scooter India (HMSIL) is planning to add a new line at its Karnataka facility with an investment of around Rs 600 crore. The new line can produce another 600,000 units to the existing 1.8 million units.

Meanwhile, the two-wheeler major has said it will double its new two-wheeler Navi's production capacity. Besides, it is also planning to launch at least 10-15 products during the current financial year.

Yadvinder Singh Guleria, operating head - sales and marketing, senior vice president, HMSIL said across the four plants - Haryana, Rajasthan, Karnataka and Gujarat - the company's cumulative annual production capacity is around 5.4 million units. HMSIL will also start production in Gujarat by end of this month, which will take company's total capacity to 5.8 million units by end of FY17.

The two-wheeler major is now planning to add a new line at its Narsapura facility at Karnataka. Currently, capacity at this plant is around 1.8 million units, which will be increased to 2.4 million units.

"We are looking at adding a new line by next year at an investment of around Rs 600 crore," said Guleria.

HMSIL, which ended FY16 with sales of 4.48 million units, is targeting around 5.4 million during the current financial year. For the first time, the company would cross the five-million mark in India. Around 65 per cent of its sales come from scooters, while the rest is of motorcycles.

HMSIL's market share in the Indian two-wheeler industry is around 24 per cent.

Guleria said Navi, which hit the market in April, has clocked sales of 10,000 units in two months. To cater to this demand, the company is planning to double its production capacity.

Navi, the 110cc two-wheeler, is not positioned as scooter or a motorcycle, but a new segment.

The company, which got around 4,500 touch points is planning to expand it to 5,400 outlets by end FY17. Around 70 per cent of these will be beyond tier-II, said Guleria. He said currently 25-30 per cent of sales are in rural parts of the country.

VITAL STATISTICS

• New line at Narsapura plant to add 600,000 units to existing capacity of 1.8 mn
   
• Plans to launch 10-15 products in FY17
   
• Cumulative annual capacity is around 5.4 mn units
   
• Around 65% of sales come from scooters
   
• Market share in two-wheeler industry is around 24%
   
• Navi has clocked sales of 10,000 units in two months