HMSI to invest Rs 630 cr to ramp up capacity by 0.6 mn by 2020

Honda Motorcycle & Scooter India (HMSI) on Thursday said it will invest Rs 630 crore to set up a new assembly line in its Gujarat plant for expanding its capacity by 0.6 million units per annum to seven million.

The new assembly line will come up at its scooters-only plant at Vithalapur near Ahmedabad, and will be commissioned by 2020, the company said in a statement.

This will be the 12th assembly line for the Japanese auto major that began its independent journey in 2001.

"The new plant will expand our annual production capacity to seven million, from 6.4 million now, and will involve a capex of Rs 630 crore," HMSI, which operates four plants in the country, said in the statement.

The firm opened the scooters-only Vithalapur plant in February 2016, with a 0.6-million capacity. The capacity was doubled to 1.2 million in June 2016.

"Over the years, we've been investing and expanding our capacity to enhance our market. The additional capacity at our fourth factory reinforces our commitment to this market and serve this market faster," said Minoru Kato, president and chief executive, HMSI.

Honda set up its first plant at Manesar in Haryana, the second at Tapukara in Rajasthan and the third at Narsapura, near Bengaluru. All these plants make automatic scooters and motorcycles. It opened its fourth plant, which makes just scooters, at Vithalapur in Gujarat.

Most of the expansion came in after FY11, when it had only 1.6-million units capacity. Between FY11 and FY18, HMSI ramped up its capacity to 6.4 million units.

Honda, the second largest two-wheeler maker in the country, sells the the world's largest two-wheeler brand, Activa scooters. In August, it's CB Shine became the largest selling executive class motorcycle in the country.

Honda India contributes over 32 per cent of the global volume of the Japanese company and is the largest market for the parent firm.