On a fast track

New Delhi, Dec. 25: Honda Siel Cars India Ltd — the Indian arm of Japan’s Honda Motor Co — is planning to set up another manufacturing facility as demand for its top-selling City sedan continues to be heavy.

“If the current demand for our models sustain, then we will require additional manufacturing facility,” Neeraj Garg, head of marketing at Honda Siel Cars, told The Telegraph. “But this will take some time as it requires proper planning.”

Demand for the City sedan and the Accord luxury family car, which are manufactured at a plant located on the outskirts of Delhi, has been heavy and there is a waiting period between four to six weeks for delivery. Honda Siel — in which Honda holds around 99 per cent equity with the rest in the hands of the Sriram family — also markets the CR-V utility vehicle, which is imported as a fully-built unit.

“The waiting period for delivery continues to be high although we have doubled the production capacity to 106 units a day,” said Garg adding the plant has a manufacturing capacity of 30,000 units in double shifts.

The 1.5-litre City sedan, which sports a sticker price of Rs 6.67 lakh for the lower-end model, and although provides a power output of 77 bhp against the earlier version’s 100 bhp, has proved to be very popular.

It 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 fiscal and plans to invest around Rs 100 crore in 2004, for upgradation of current manufacturing facilities and an increase in the localisation content.

“Going by the current demand there’s no alternative but to have another manufacturing facility,” said an auto analyst with a global consulting firm.

During the first eight months of the current financial 2003-04, the car maker witnessed a nearly 50 per cent rise in unit sales, which, company officials said, would drive up revenues by nearly 60 per cent. Honda’s main competitors include the Indian unit of Hyundai, Ford and General Motors and its models are positioned in the mid-car segment, which accounts for nearly a fifth of the car market of 542,000 units a year.