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Honda’s Karnataka plant is now company’s biggest in the world for two-wheelers

LiveMint logoLiveMint 02-08-2017 Sharan Poovanna

Bengaluru: Honda Motorcycle & Scooter India Pvt Ltd (HMSI),a subsidiary of Japan’s Honda Motor Company Ltd, on Wednesday inaugurated the fourth assembly line in its Narsapura, Karnataka facility making the unit in Karnataka the biggest two-wheeler factory for the company.

The new line increases the production capacity of the Narsapura plant to 2.4 million units.

Honda said that the new assembly line in Narsapura takes its total investment in India to over Rs10,000 crore since 2001.

“ The latest expansion further fortifies Honda’s ability to serve the market faster with its increased annual production capacity to 6.4 million units from all plants (in India),” Minoru Kato, president and chief executive of HMSI, said in a statement.

Honda’s confidence stems from its increasing market share in the segment with consistent double digit growth in domestic sales and exports.

In July, Honda two wheelers registered a 20% growth and gained 2% market share (total 28%) selling 544,508 units compared to 453,884 units in the corresponding period last year. The bulk of the sales (511, 939 units) were in the domestic market.

In the April-June quarter, Honda’s erstwhile Indian partner Hero MotoCorp, the market leader, sold 1.8 million units, up 6.15%, in the domestic market, staying ahead of Honda, which grew 19.4% during the quarter and sold 1.5 million units.

To be sure, Honda’s sales are driven by its scooters while Hero dominates the motorcycle market, which has slowed significantly largely due to tepid growth in the rural economy.

“In 2016-17, India alone contributed 28% to Honda’s global two-wheeler business and became the number 1 contributor. The growing Indian two-wheeler market is a top priority for Honda,” Shinji Aoyama, chief officer, regional operations (Asia &Oceania), Honda Motor Co said in a statement.

The company’s cumulative investment in the Narsapura plant since 2013 is Rs 2600 crore, HMSI said in the statement. The new assembly will create 7000 direct employment and 15000 indirect employment opportunities, it added.

Amrit Raj contributed to the story

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