Honda setting up new facility in Rajasthan


Jaipur : Automobile major Honda Siel Cars India Ltd. (HSCI) Thursday unveiled a long-term plan to set up a new compact car manufacturing facility in Alwar in Rajasthan with an initial investment of over Rs.10 billion ($230 million).

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A Memorandum of Understanding was signed between HSCI and the Rajasthan government for setting up the much-awaited plant, the second in India.

Addressing the media, M. Takedagawa, president and CEO, Honda Siel Cars India Ltd., said: “Signing of the MoU marks an important day in the history of HSCI. It has been an extremely successful journey for Honda in India and with the proposed plant we plan to foray into the volume segment – the compact car segment.”

Explaining the reason for choosing Rajasthan for the second unit, Takedagawa said: “North India comprises 40 percent of our total sales, so proximity to this market was a big consideration for us. The state government’s proactive support and the encouraging investment climate are some of the other major factors in the decision.”

The new project would be spread across 600 acres of land and have an initial production capacity of 60,000 units per annum. In addition to the car manufacturing facility to be spread over 400 acres, it will have several supplier units.

The planned capacity of the plant is likely to go up to over 200,000 units per annum, with investments up to Rs.20 billion ($460 million) in the future. It is scheduled to roll out the first car by 2009-end.

Honda Siel Cars India’s current manufacturing unit at Greater Noida, Uttar Pradesh, has a production capacity of 50,000 units that will be expanded to 100,000 units by the end of this year. With the new Greenfield project in Rajasthan, HSCI’s total capacity will increase to more than 150,000 units by 2010.