Our order books for scooters are full: Keita Muramatsu

Interview with CEO, HMSI

After Tata Motors, Ford India and Maruti Suzuki, now Honda Motorcycle & Scooter India (HMSI), too, has signed a state-support agreement (SSA) with the Gujarat government to set up a manufacturing plant in the state. At an investment of Rs 1,100 crore, the new plant at Vithlapur in Ahmedabad will help the two-wheeler maker build on its scooter portfolio in the country, Keita Muramatsu, president and chief executive officer of HMSI, tells Vinay Umarji. Edited excerpts:

How significant will the new two-wheeler plant in Gujarat be for HMSI?

We have decided on the Gujarat plant after considering the scope of the scooter market in India, which is growing at 30 per cent compared with 15 per cent annual growth in the overall two-wheeler segment. HMSI has a 53 per cent penetration in the domestic scooter market. Our focus is to increase scooter penetration. Our order books for scooters are full and customers have been kept in waiting. For us, the western Indian market is one of the biggest for scooters. We are receiving good support from the Gujarat government and the plant will not only be closer to ports, but also to some of the essential scooter markets in this region.

The new plant in Gujarat will be your fourth so far...

Yes. We came up with our first plant in 2001, which now has a capacity of 1.6 million. Then in 2011, our second plant came up in Rajasthan with 1.2 million capacity and in 2013 in Karnataka with 1.8 million capacity. In December 2015, our fourth plant will come up in Gujarat at 1.2 million capacity. The total capacity is going to be eight million soon.

You mentioned that 22 suppliers will also follow HMSI in setting up capacity in Gujarat...

We won't be able to name them and we do not know how much more investment they will bring in. But they will be some of our prominent suppliers of components such as electrical components, engine parts, etc.

What kind of support is Gujarat government providing as part of the SSA?

Similar to what the government has been providing to other companies in the state. These will be in terms of stamp duty exemption, electricity duty exemption, fiscal incentives in terms of VAT (value-added tax) as well as infrastructure support such as electricity, water and access roads.

How are you looking at exports from this plant?

We have not yet decided on exports from this plant. Of course, one of the reasons for choosing Gujarat as a location was due to its proximity to ports. In due course of time, exports will depend on the kind of orders we get.

What two-wheelers and models will HMSI be manufacturing from the Gujarat plant?

We will be manufacturing scooters, especially the Activa model - the number one scooter in India. Other scooters might also be made manufactured eventually.

Will HMSI launch new models from this plant?

We cannot say that as of now.