State plans to develop auto hub in Narasapur near Bangalore

One year ago nobody knew about Narasapur, a village in Kolar district situated about 52 kms from Bangalore. But on today, the village is on course to become a major automobile hub in South India as several automotive giants are in the process of setting up shop there. Thanks to the efforts of the department of commerce and industry, government of Karnataka, which is preparing to organise the second edition of global investors’ meet (GIM) in June this year, the automobile companies are making a beeline to Karnataka.

Already, Honda Motorcycle and Scooters India Limited (HMSI), a subsidiary of Japanese auto major Honda Motor Corp, is setting up its fourth two-wheeler plant in Narasapur at an investment of Rs 1,350 crore.

The state government has allotted 100 acres to the company. The new plant would go on stream by the first half of 2013. According to the company, the assembly unit has the capacity to produce 1.2 million units a year in the first phase. Eventually, the production capacity would be ramped up to 1.8 million vehicles a year in the second phase. The company has created employment opportunity for 3,000 persons, a top state government official said.

“In addition to HMSI, the government has also allotted about 150 acres more to Honda’s Tier-I suppliers for developing an ancillary park. In all, 13 vendors would be setting up their manufacturing units in the park with a combined investment of over Rs 2,000 crore,” M Maheshwar Rao, commissioner for industrial development and director of industries and commerce, told Business Standard.

HMSI’s vendors include XCD Corporation India Pvt Ltd, Musashi, Advik, Badve, Jay Ushin, Nippon Compo India and T S Interseat among others.

Apart from HMSI and its vendors, Swedish truck and bus maker Scania is setting up its truck and bus body building facility in Narasapur Industrial Area. To add to this list is UK-based premium bike maker Triumph Motorcycles, which has zeroed in on Narasapur for a local assembly plant. The company has recently signed a memorandum of understanding with the State government, Rao said.

About 40 acres land has been identified for the company for its plant. Scania has chosen Narasapur to set up its truck assembly plant at an investment of Rs 150 crore. The facility will serve as a completely knocked down (CKD) assembly unit for truck and bus chassis during phase one of the operations. It will employ about 800 people in this facility over the next five years.

Scania plans to roll out 2,000 heavy trucks and 1,000 inter-city buses and coaches from this plant in the next five years. Besides this, it plans to sell about 1,500 engines within the same period. In the next phase, it will build trucks and buses from the same facility. During the first phase, it will initially assemble trucks and by 2014, it plans to roll out buses.

Other than automobile companies, the government has allotted land to Mahindra Aerospace Pvt Ltd to manufacture small aircraft at Narasapur. The company will invest Rs 285 crore in this facility.