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Employees work on an assembly line of Honda Motorcycle & Scooter India during a media tour to the newly inaugurated plant at Vithalapur in Gujarat. Photo: Reuters
Employees work on an assembly line of Honda Motorcycle & Scooter India during a media tour to the newly inaugurated plant at Vithalapur in Gujarat. Photo: Reuters

Honda commissions scooter factory in Gujarat

Honda has invested `1,100 crore for the new facility, which has a production capacity of 1.2 million units

Vithalapur: Honda Motorcycle and Scooter India (HMSI) Pvt. Ltd on Wednesday commissioned its fourth manufacturing plant in India at Vithalapur in Ahmedabad district of Gujarat.

The company has invested 1,100 crore for the new facility, which has a production capacity of 1.2 million units. It takes Honda’s cumulative production capacity in India to 5.8 million units per annum from 4.6 million units.

The ‘scooters only’ factory, which can manufacture motorbikes in the future depending on market demand, is the world’s largest scooter manufacturing facility, the company claimed. The company will roll out its Activa and Dio models from the Gujarat unit.

As many as 22 vendors of HMSI have set up shop in and around Vithalapur, and have cumulatively invested around 1,100 crore. The factory will produce around 600,000 scooters per annum; production will be scaled up to 1.2 million scooters by mid-2016.

The fourth plant is expected to give HMSI the much needed volume boost needed to clear its current order backlog of 30,000 scooters till January, according to Y.S. Guleria, senior vice president, sales and marketing, HMSI.

Guleria said that due to the increasing “scooterisation," a trend seen earlier in developed markets, scooters now contribute nearly 30% of the two-wheeler market in India. HMSI is the undisputed market leader in this segment in India with a market share of 56% and growing, he added.

“The overall two-wheeler market in India has declined by 1%, while motorcycles have registered a sales decline of 2% between April 2015 and January 2016. Scooters, however registered a growth of 12%," Guleria said.

Keita Muramatsu, president and CEO of HMSI, said that as much as 65% of HMSI’s sales in India come from scooters and the country contributes roughly 25% of HMSI’s global sales of 17.5 million two-wheelers.

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