Honda Plans to have 7 Manufacturing Facilities by 2020

Honda is working very seriously to get its waiting period for few of its products down drastically in the coming years.  The company has managed to become a massive player in the Indian sub – continent by its mass appealing bikes and of course, its scooters. The amount of efforts that the company has put in to attain this status is mind – boggling.

The company presently has plans to increase its manufacturing bases in India that would help reduce the difficulties that the company currently faces owing to excessive demand of the products including spares for the same. The reason for this success is the fact that Indians have started considering Honda products to be Value For Money in nature, thereby making them invest on it without much swings.

The company is working on a target of attaining 10 Mn two – wheelers mark in India over years and in order to make this figure come alive, Honda is planning to own seven manufacturing facilities before the year 2020. There’re presently two plants – one in the state of Haryana and the other in Rajasthan.  There’ll be two more coming up very shortly in Karnataka.

The company is eyeing the states of Gujarat and Maharashtra for its forthcoming plants, though there is no official confirmation about the same. The other state that is being considered as of now is Uttarakhand. Eastern zone is also taken into consideration for its future plans.

“We will not be entirely surprised if HMSI then chooses to set up its seventh plant in the eastern region. After all, this part of the country has tremendous growth potential and other markets in the northeast can be easily accessed from here,” an auto ancillary supplier told Business Line in a recent interview.

Once the company manages to sell 10 Mn units in India which would include both bikes and scooters, then the company would be enjoying a flat 30 per cent market share in the nation which is a great deal for Honda. The company is also working on the same with mouth shut and fingers crossed. The company presently holds a market share of 14 per cent with 2.1 Mn units sold till now.

Business Line had reported recently that ‘Sources say parent company, Honda, is keen that India plays a larger role in its two-wheeler business, ahead of Indonesia and Vietnam. The quest for leadership is also top priority following the Japanese company’s recent parting of ways with the Hero group which produces over six million two-wheelers annually.

The commissioning of its Rajasthan plant saw HMSI report 27 per cent higher production last fiscal. This will be up to 50 per cent in 2012-13 at three million units and, according to sources, will be closer to five million units by FY ’15 when the Karnataka facilities are firing on all cylinders.’

“It is only after this period that the real tug-of-war will begin in the two-wheeler space. Both Hero and Bajaj will be as keen to increase numbers and stay ahead,” an industry veteran said. By 2020, all three companies could then be evenly poised at 10 million units annually. That would make India a great arena for these contenders to battle and the winner will take away the majority of the share while small players will be forced to act as silent spectators. It’s high time for all the players in the Indian market to gear up before they get lost in the years to come.

The company is closely following Bajaj Auto in terms of export volumes which have got a great scope in terms of volume and the revenue. The export revenues account for almost 40 per cent of Bajaj Auto’s total revenues. That’s the value the export mark lets of these two wheeler giants can fetch to the company par se. Honda’s concentration on this segment will not recede at any point of time besides concentrating on the domestic front.

The Finance news daily also quoted that ‘It would also be imperative for HMSI to get cracking in the executive segment in motorcycles where Hero MotorCorp reigns supreme. At present, scooters account for nearly two – thirds of its numbers whereas bikes have potentially much more to offer in the Indian context.’

With the setting up of new plants in the years to come, will Honda reign the Indian two wheeler market ahead of all the Indian companies. Let’s wait to watch the heroes in action very soon.