Honda to Build World's Largest Scooter Manufacturing Plant in India!


By Harshavardhan Kylas


Honda Activa 125


Hero Honda is now a forgotten name and brand. A few years ago, the joint venture between the two companies marked the era of a new beginning in the motorcycle industry. Honda’s technical expertise and Hero’s sales and marketing strategies worked hand in hand and helped in establishing the company as the number one two-wheeler brand in the country. But all this changed in 2010 when the two companies amicably decided to go their separate ways. Since then both have enjoyed a good run of success, but they continually try to outperform the other, in order to strengthen their own position in the Indian market.


Hero for long has been market leaders in the commuter segment with the Splendor series bringing in a large chunk of sales and profits. Honda for long has been keeping an eye on their Indian counterpart and has been trying their level best to get ahead of but to no avail. Now, it looks like they might have a new solution to achieve their goal.


Honda has revealed its plans to set up a new scooter plant in Ahmedabad, Gujarat. The company will reportedly be investing Rs 1,110 crores towards this. The plant is expected to supply 12 lakh units of scooters annually.


The main reason behind this move is the scooter market’s sudden upward surge. The segment has seen a tremendous growth, and most of Honda’s competitors are showing their intent of expanding into it, in an attempt to score a portion of the market share. Honda has seen a great demand for their range of scooters, but is struggling to cope with the ever increasing demand for them. To counter this, Honda has to ramp up production multifold, which is why a new facility exclusively for scooters needed to be proposed.


"Even though we raised our production with three new scooters, demand still outstrips our estimates. While scooter production has trebled in the past decade, we still have a backlog of 60,000 scooters that should multiply in the festive months ahead," said YS Guleria, Honda VP for marketing and sales. 


Honda currently possesses three plants across the country; one each in Haryana, Rajasthan and Karnataka with the three plants totally producing 46 lakh units in a year. The new plant is set to function from 2016.


With a 53% market share, Honda is undisputedly the current leader in the scooter segment, and once production at the proposed factory reaches full swing, it would come as no surprise if it surpasses Hero to the top spot of the Indian two-wheeler market.


Source - Economic Times


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