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With Honda Motorcycle and Scooter India (HMSI) entering Gujarat, a host of suppliers are likely to follow. It is expected about 20 vendors will start operations in the state, together accounting for an investment of Rs 1,500-2,000 crore and employing 8,000-10,000 people.
On condition of anonymity, a senior HMSI official said, "Typically, we follow a policy of buying more from the region where we are operating. For example, in the North, we source about 80 per cent of our requirement from North-based suppliers, while in the South, about 75 per cent is sourced from suppliers operating in that region. We have a similar plan for the Gujarat factory." He added earlier, many of the company's vendors had moved to Narsapura Industrial Area near Bangalore (when the company had started operations there), and it was expected a similar case would be seen in Gujarat.
"Typically, these (vendors following HMSI to Vithlapur) will be suppliers who make bulky and aesthetic parts, or are involved in stamping, moulding, dye-casting, motorcycle and scooter seat makers, and a few sheet-metal fabricators and clutch manufacturers, too. Together, they will invest Rs 1,500-2,000 crore," the official said, without divulging any names. The company, however, hasn't earmarked any land for suppliers at its factory site. To set up their respective facilities, vendors will have to buy land in nearby areas.
HMSI has bought about 200 acres at Vithlapur for Rs 15-20 lakh an acre.
While it is expected 13 vendors will come to Vithlapur, about 110 km from Ahmedabad, the remaining are likely to set up shop at Sanand. HMSI's supplier base could generate substantial employment - 8,000-10,000. HMSI plans to employ 3,000-4,000 people at its plant, in phases.
Major vendors who followed HMSI to Karnataka include XCD Corporation India, Advik, Jay Ushin, Nippon Corporation India and TS Interseats. Those in the know say some of these companies are likely to come to Gujarat, too. The official quoted earlier said while some local suppliers from Gujarat would be involved, too, as of now, no talks were underway with small and medium enterprises in Rajkot, considered an automotive component hub in the state.
GEARING UP
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About 20 vendors may start operations in Gujarat, accounting for an investment of Rs 1,500-2,000 crore and employing 8,000-10,000 people
- HMSI has bought about 200 acres at Vithlapur for Rs 15-20 lakh an acre
