Honda Siel lines up expansion

Honda Siel Cars India Ltd (HSCIL) is planning to invest Rs 150 crore to ramp up its capacity to 50,000 units annually and is eyeing over 50 per cent growth in turnover at Rs 2,500 crore this fiscal.

The company is currently working on full capacity of 30,000 units per annum at its plant located at Greater Noida. "We are investing Rs 150 crore to increase capacity to 50,000 units a year by the end of calendar 2005 from 30,000 units now," HSCIL president and CEO H Yamada said launching a variant of sports utility vehicle 'CR-V'.

"So far the plan is to manage the expansion without any kind of debt," he added.

The company aimed 56.25 per cent rise in topline during 2004-05 over Rs 1,600 crore last fiscal, HSCIL vice-president N K Goila said.

Having wiped out accumulated loss last year, which peaked at Rs 150 crore, HSCIL also targets Rs 100 crore in net profit during 2004-05 against Rs 75 crore during 2003-04.

HSCIL was studying various model options to launch in India as part of a strategy to become market leader in the premium car category, Yamada said.

HSCIL plans to sell 37,000 units this financial year. The company aimed to sell 32,200 units of City' sedan, 3,000 units of luxury sedan 'Accord' and 1,800 units of its SUV model 'CR-V', he said.

The company sold 21,703 vehicles in 2003-04, including 18,392 Citys, 2,111 Accords and 1,200 CR-Vs. At present, 'City' has 29 per cent market share, 'Accord' 40 per cent and 'CR-V' 28 per cent in their respective categories.

The new Honda CR-V is powered by a 2.4 litre petrol engine compared with the 2.2 litre earlier and carries a price tag of Rs 14.57 lakh in Delhi. Another version with automatic transmission is priced at Rs 15.57 lakh.

Honda mainly competes with Ford, Hyundai, and local firm Tata Motors Ltd in India's mid-size car market and has faced surging demand for the new version of its City car since its launch in October 2003.

Yamada said the company was also working to boost the local content in the City to 79 per cent by the end of March from 69 per cent to help reduce costs. Honda Siel Cars, a joint venture between Japan's second-largest automaker and local firm Siel Ltd, began selling cars in India in December 1997.