Honda Motorcycle to invest $75 Mn in Manesar plant

By SiliconIndia   |   Wednesday, 26 December 2007, 08:00 Hrs
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New Delhi: Honda Motorcycle and Scooter India (HMSI) said that it will invest about $75 million (Rs 300 crore) over the next three years for expanding infrastructure of its Manesar plant and for research and development (R&D).

"The funds will be used to upgrade the company's Manesar plant, besides, investing in the research and development for new models," said Shinji Aoyama, President HMSI.

The company plans to launch four to five new models and increase the annual manufacturing capacity to 1.2 million by 2010. The current production rate is about one million units.

The company also plans to launch a new motorcycle in the first half of next fiscal as expects the demand to grow in the world's second-largest two-wheeler market.

According to Society of Indian Automobile Manufacturers (SIAM) Motorcycle sales have fallen in India this year as a five-year-high interest rate deterred buyers. Sales have fallen by 12.3 per cent in the eight months ended November 30. However Scooter sales, have risen by 16.8 per cent in the same duration.

"The demand for automatic scooters in metropolitan cities is rising because of traffic jams as these provide hassle-free transportation," said Aoyama.

The company expects to sell one million vehicles in the next fiscal. Of these seven lakh units will be scooters and the rest will be motorcycles.

"We expect the sales to touch 6.10 lakh units of scooters and 2.7 lakh units of motorcycles in the current fiscal year," he added.

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