Tokyo, Mar 9, 2010 - ( ACN Newswire ) - Honda Motorcycle & Scooter India (Pvt.) Ltd. (HMSI), Honda's wholly-owned motorcycle production and sales subsidiary in India, announced plans to build a second motorcycle production plant to meet increasing demand in the rapidly growing motorcycle market in India.

To build the second plant, HMSI will acquire approximately 240,000 square meters of land within the Tapukara Industrial Area, Rajasthan, which is approximately 40km from the existing plant and approximately 90km from Delhi. The new plant is scheduled to become operational in the latter half of 2011 with annual production capacity of 600,000 units. Further, HMSI is expanding annual production capacity of its existing plant from the current 1.25 million units to 1.55 million units by the end of this month, with a further expansion to 1.6 million units already scheduled for next year. As a result, HMSI's total annual production capacity will be 2.2 million units when the second plant becomes operational. The new plant will employ approximately 2,000 associates at initial stage of full capacity. The total investment will be approximately 4.7 billion Rupee (approximately 8.9 billion yen. (1 Rupee = approximately 1.9 yen)

Utilizing production technologies refined at the existing plant as a starting point, HMSI will strive to improve process ergonomics and employ more advanced automation and other measures to its second plant. It will also be more environmentally responsible plant by proactively reducing energy consumption during production and by employing other environmental measures such as water recycling.

India represents the world's second largest motorcycle market behind only China, and industry-wide motorcycle sales in India for 2009 reached 8.78 million units (up 19% compared to 2008). HMSI was established as a wholly-owned motorcycle production and sales subsidiary of Honda in 1999 and began production in 2001. HMSI's sales have grown steadily with 2009 sales of approximately 1.09 million units (up 11% compared to 2008) achieving a record high for nine consecutive years.

In order to fulfill the diversifying needs of customers in the growing market of India, HMSI is enhancing its product lineup with last year's full model change of the Activa 110cc scooter, one of the company's best-selling products, and by introducing the CB Twister 110cc motorcycle in February 2010 in the 100-110cc market segment, which accounts for approximately 50% of total motorcycle market. The decision to build the second motorcycle production plant was made to better accommodate a further increase in demand in India.

About HMSI's plants

First plant (existing plant)

Location:             IMT(2) Manesar, Gurgaon District, Haryana
Employment:           Approx. 6,500 associate (as of February 2010) 
Annual Production:    1.55 million units (as of the end of March 2010) 
Land Size:            210,000 m2
Production Models     Scooter: Activa, Dio, Aviator 
                      Motorcycle: Unicorn, Shine, CBF Stunner, CB Twister 

Second plant

Location:             Tapukara Industrial Area, Alwar District, Rajasthan
Employment:           Approximately 2,000 associates
                      (at initial stage of full-capacity) 
Annual Production:    600,000 units (initially)
Land Size:            240,000 m2 
Production Models     Motorcycle models (plan)

Establishment:        August 1999 
Location:             IMT Manesar, Gurgaon District, Haryana state, India 
Capital:              3 billion Rupee (approximately 5.7 billion yen) 
Capitalization Ratio: 100% Honda Motor Co., Ltd. 
Representative:       Shinji Aoyama, President & CEO 
Business Activities:  Production and sales of motorcycles and scooters 
Dealership locations: 725 locations (as of February 2010)

Honda
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