Honda Siel Cars India Ltd, which makes the popular City sedan, is targeting sales of 90,000 cars next fiscal year as it doubles its manufacturing capacity in a bid to overcome a production shortfall, said its chief executive officer (CEO).
“We are looking at an increase of 32%,” said Masahiro Takedagawa, president and CEO of Honda Motor Co.’s Indian unit, at the inauguration of its refurbished plant at Greater Noida on the outskirts of Delhi. Honda expects to sell 68,000 units this fiscal year and can make 100,000 vehicles a year now. “We had a shortage, a lack of production,” said Takedagawa referring to the company’s slow growth rate of 1.65% so far this fiscal year. “This year we don’t have it.”
Honda has invested Rs1,620 crore so far in the facility and will spend Rs1,000 crore to build a new factory in Rajasthan. Honda is among the companies such as Nissan Motor Co and Volkswagen AG which are spending a combined Rs30,000 crore in new factories. Sales of cars in India are estimated to triple to three million a year by 2015, according to the Society of Indian Automobile Manufacturers, an industry grouping.
Honda is planning to introduce a compact car next year in a segment where three of every four cars in India are sold, and double its dealerships to 160 over three years. “We are entering in smaller cities and towns in preparation of the compact car,” he said.