Hironori Kanayama (right) and Yoshiyuki Matsumoto in New Delhi on Tuesday. Picture by Yasir Iqbal
New Delhi, April 2: Japanese auto giant Honda will invest Rs 2,500 crore by next year to expand its manufacturing capacity in the country.
The company plans to launch five vehicles in the next two-to-three years to strengthen its market position.
Honda will set up a passenger car assembly line, a diesel engine component unit and a forging plant at its Tapukara facility in Rajasthan.
The 437-acre Tapukara plant will have capacity to roll out 1.2 lakh cars every year. It will also manufacture 1.6 lakh diesel engines per annum from next year. The facility will become Honda’s first fully integrated diesel engine plant in the world.
With the assembly line in Rajasthan and the Greater Noida facility, the company’s capacity will go up to 2.4 lakh units annually. The new assembly line and the forging plant will generate an employment of 2,200 by 2014; the diesel facility hires another 265.
Honda today unveiled a 1.5-litre diesel engine, which will be first fitted in its upcoming sedan Amaze.
“We are looking at increasing the localisation of the diesel engine. Our target is to have 90 per cent local component in the 1.5-litre diesel engine by next year,” said Yoshiyuki Matsumoto, president and CEO of Honda Motor India.
The company will launch diesel options in all its future volume models in India and it may look at different variants of the 1.5-litre diesel engine as well, Matsumoto said. “We will launch five important models, including full model changes in India in the next 2-3 years.”
Matsumoto hinted at a likely launch of compact sports utility vehicles.
Honda is targeting to sell 60 lakh units per year globally by March 2017, of which 30 lakh units will be contributed by the emerging markets. At present, the company sells around 35 lakh units annually.
“We are operating only in 10 per cent of the Indian car market. We are now prepared to expand into the diesel segment and increase our presence to 50 per cent of the market here in the next few years,” Honda Cars India Limited president and CEO Hironori Kanayama said.
The company said it would start exporting diesel engine components to the UK from the Tapukara plant in the future. Honda Siel Cars India, Honda’s erstwhile joint venture with the Siel group, had earlier committed itself to an investment of Rs 1,000 crore to set up the facility at Tapukara with an installed capacity of 60,000 cars per annum.
Honda Motorcycle & Scooter India (HMSI) today said it expected sales to grow 43 per cent this fiscal to 39.3 lakh units on the back of product launches and fresh production capacities.