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Apr 20, 2017 01:39 PM IST | Source: Moneycontrol.com

Honda to invest Rs 1,600 cr on a new production line, launch 4 new models

As its sets a target to clock at least 6 million units in sales this year including 5.7 million in India, the Delhi-based company is ramping up its rural retail presence, a consumer pocket where Hero is the established leader.

Honda to invest Rs 1,600 cr on a new production line, launch 4 new models

Swaraj Baggonkar

Moneycontrol News

Honda Motorcycle and Scooter India (HMSI), the country’s second largest two-wheeler seller, will invest Rs 1,600 crore this year in setting up a new production line as well as launch four new products to take the battle to market leader Hero Motocorp.

As it targets at least 6 million units in sales this year including 5.7 million in India, the Delhi-based company is ramping up its rural retail presence, a consumer pocket where Hero is the established leader.

Honda is adding 600,000 units to annual capacity at its third plant in Karnataka taking the plant’s total capacity to 2.4 million and the nation-wide total capacity to 6.4 million. The Karnataka plant will thus have 4 production lines which will take the total number of production lines to 12. The new line will be operational in July.

Of the four models two models will be scooters and two will be motorcycles, declared senior executives of HMSI who are in Mumbai for a media interaction. A 1000cc premium off-road motorcycle Africa Twin will be one of the four models.

India is already the largest market for Honda globally contributing 30 percent of its worldwide sales. The company is aiming to further enhance its presence in India for which it is adding 500 touch-points this year taking the total to 5800.

But as many as 75 percent of the new addition will be made in the rural areas, taking the market leader Hero head-on as rural markets contribute half of Hero's sales.

HMSI commands a 25 percent share of the Indian market. Last year it clocked sales of 5,008,103 units, clocking a growth of 12 percent over the previous year. It sells 20 models in India, including four CKD/CBU premium bikes, five scooters and eleven bikes. It has four plants operational as of now.
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