Honda Activa

Honda Motorcycles and Scooters India (HMSI) announced on Thursday expansion plans with the setting up of a third factory at a location close to the IT capital of India, Bangalore.  For the Southern state primarily known for the IT sector mainly concentrated in and around its capital, this bit of news could come as a welcome break as investments in the auto manufacturing space have been few and far in between, with most automakers preferring the neighboring state Tamil Nadu, for their investments.

This will take its production capacity to four million units by early 2013. Market leader Hero Honda has an annual capacity of six million units and Bajaj Auto about five million units. The Japanese company is expected to invest around Rs 1,000 crore in this plant near Bangalore, said a person close to the development. Production will start by the first half of 2013, at an installed maximum capacity of 1.2 million units a year.

“We chose Karnataka since South India is a very important market for us and we need to be close to it. There is also access to the ports in case we want to export,” a company official said. Even as the first phase (six lakh annual capacity) of its second factory at Tapukara, Rajasthan is scheduled to start operations in July, HMSI has decided to advance the second phase (1.2 million annually) of the same plant to March 2012. The strategy to speed up work on both the second and third plants underline Honda’s intention to quickly snatch the premier spot in the world’s second largest two-wheeler market.

“This capacity expansion plan will increase HMSI’s total annual production capacity to four million units, preparing HMSI for further and rapid growth of the market,” a company statement said.

As a prospective Honda two wheeler buyer, you can expect waiting times to go down if Honda’s expansion plans work according to plan and also the spare parts situation improve. Currently, Honda Activa buyers have to wait for 2-4 months for delivery even as we’re hearing many harried customers of the Honda CB Twister complaining about lack of spare parts, especially in times after a accident. Hopefully, Honda will be able to address these issues on a war footing once its production expansion begins.

At present, it has a plant in Manesar, Gurgaon with an annual capacity of 1.6 million units where it manufactures models such as the Activa, Dio, Aviator, CB Unicorn, CB Shine, CBF Stunner and the CB Twister. In 2010, it sold 1.5 million units (up 40 per cent compared to 2009).

Also see – Snap – Honda Activa