Wednesday, July 20, 2005

Honda to invest Rs. 650 Cr in India

Japanese car brand Honda Motor is planning to invest Rs 650 crore in the Indian car market in the next three years. Out of which the company is all set to put in Rs 150 crore this year to up capacity at its Surajpur plant, from 30,000 to 50,000 units. The balance Rs 500 crore is expected to be spent on productionising new models and doubling capacity further to 100,000 units per annum. The entire investment is to be funded by Honda Siel’s internal accruals The investment is part of Honda’s fresh fourth-gear strategy for India. Buoyed by a fast growth in Honda car brands in India the company is planning to introduce a new volume model, the Civic, in the Indian market. In addition to meeting the growing demands of its existing models — City and Accord— the increased capacity of the plant would also accommodate the start up of local production of the new Civic, within the next year. The new Civic, which will roll out in the US soon and debut at the Tokyo Motor Show in October this year, will have a specially-developed Asian variant which will come to India. While Honda’s Japan plant will be the mother unit for this model, the company will source from Thailand, given it’s importance in Honda’s strategy post the Indo-Thai FTA, say sources. Capacity expansion and new production introduction is part of Honda’s long-term plan to emerge as “the best” automobile brand in India.