| On a roll
New Delhi, Dec. 4: Honda Siel Cars India Ltd today said it will invest an additional Rs 100 crore within a year to upgrade production facilities and increase the localisation content.
Honda Siel, a joint venture between Japan’s second largest car maker Honda Motor and local firm Siel, also said it expects a 60 per cent jump in net revenue at Rs 1,600 crore, helped by a nearly 50 per cent rise in unit sales on the back of the strong showing of its new City model.
“Demand for all our three models has been very heavy and we have a waiting period between four to eight weeks for delivery,” Neeraj Garg, head of marketing of the Indian unit told reporters at a news conference.
Garg said the company expects to sell around 23,000 cars in the year to March 31, including 2,000 Accords, up from 13,363 sold in the past financial year.
The car maker, which has a plant on the outskirts of New Delhi that makes the City sedan and the Accord luxury family car, said it has doubled production capacity to 106 units a day.
“By the end of the month, we would realise the full effect of the production increase when the waiting period will come down,” said Garg.
Asked when the company would set up another plant since it expects to sell around 1 lakh units a year by 2010, he said: “Nothing has been firmed up yet but we would definitely require another plant.”
Garg also said the firm is not planning to increase prices although there has been a rise in input costs.
“We would try to keep the current price as long as possible. We have comfortable profit margins on our units and so would be able to absorb a rise in production costs for quite some time,” Garg said.
The car maker is currently procuring tyres from Bridgestone and importing steel from Thailand. Company officials said the company has no immediate plans to introduce a small car for India’s high-volume compact market.
Honda Siel — where Honda holds around 99 per cent equity with the rest held by the Shriram family — also markets the CR-V utility vehicle which is imported as a fully built unit. Its main competitors include the Indian unit of Hyundai, Ford and General Motors.