The Japanese auto major, Honda is looking to invest almost INR 4,000 crore for establishing a new factory in Gujarat that would be its third company in the country. The company already has a factory at Tapukara in Rajasthan and Greater Noida in UP. Currently it is looking to acquire a land for the new manufacturing premises.
According to sources, the company plans to double its production in India with the new plant. The company’s total investment in the country is nearly INR 7,200 crore; the majority investment being about Rs 4,400 crore in Tapukara.
The company’s plant in Greater Noida can easily produce over 1.2 lakh cars annually, while that in Tapukara can easily churn an equal number of cars.
India is recognized as the key strategic market at the headquarters in Japan, as the country evolved as the fourth-largest Honda car market globally.
Recently, Honda launched its Jazz premium hatchback. The company has further plans to follow this by introducing new models. It also plans to bring an entry small car or a compact SUV placed under Brio.
Further the sources say that as export has not been a major part of the company’s strategy, the new plant in Gujarat may prove as a turning point as the overseas markets could also be addressed efficiently and effectively.
The company has set up, R&D, i.e. research and development facility in India that is aiding the company in controlling costs through close collaboration with key component makers and suppliers. The growing number of auto companies in Gujarat resulted into the development of a healthy eco-system. Further, the state already has investments from General Motors, Ford and Tata Motors. Maruti Suzuki, the country’s top car maker is also set to establish a factory there.
Honda sold out almost 1.89 lakh units in the period 2014-15, 41% against the 1.34 lakh vehicles that were sold in the previous fiscal.