Honda Motorcycles could be Maruti's neighbour in Gujarat

After the country's largest passenger carmaker Maruti Suzuki India, Mandal-Becharaji region is likely to see two-wheeler giant Honda Motorcycles and Scooters India (HMSI) park its project in the vicinity. According to sources in the know, HMSI is planning to set up its fourth manufacturing plant in the country in Gujarat. It has already visited the area to scout for land, claimed locals.

"The company has been looking for land in Viramgam region, which falls between Sanand and Becharaji, and also in the Mandal-Becharaji region," informed a senior government official. According to another senior official HMSI has also started looking for private land in the Mandal region to buy for its upcoming plant.

Sanand already houses auto majors like Ford India and Tata Motors and is around 70 kms from Becharaji.

The company did not comment on the matter.

HMSI has earlier said that it was looking for a suitable location to set up its fourth manufacturing plant. It recently started producing the popular scooter model Activa and its 110 cc motorbike Dream Yuga from its Karnataka plant near Bangalore. It has invested around Rs 1500 crore in the third plant.

Sources, however, say that HMSI would not require a very large tract of land in Gujarat, perhaps around 100 acres. The investment could be in the tune of Rs 1200-1500 crore.

In phase one, the third plant has a capacity to produce 1.2 million units per annum. HMSI plans to add another 600,000 units at the Karnataka plant which will take its annual capacity to 1.8 million units by end of this fiscal. With this, Honda will increase its cumulative annual production capacity by 64 per cent in just one fiscal from 2.8 million units in 2012-13 to 4.6 million units in FY-14.

The company has two facilities at Manesar in Haryana and Tapukara in Rajasthan with an annual output of 1.6 million units and 1.2 million units respectively.

For the ongoing fiscal, HMSI has a target of increasing its sales by 43 per cent to 3.93 million units, up from 2.75 million units in 2012-13.

In order to maintain its growth momentum, the company would have to focus on increasing capacity.