Honda-Siel Cars Roll-Out In 1998

Honda-Siel Cars India Ltd is set to launch its first vehicle from the Greater Noida-based plant early next year.

The estimated cost of the project is Rs 570 crore.

While Rs 180 crore will be contributed through share capital, the rest will be through term loans out of which Rs 240 crore has already been tied-up.

This was one car project which Uttar Pradesh had half-lost, and the promoters, despite taking land in Greater Noida, were toying with the idea of shifting the facility to some other state.

Now, the company has decided to stay put in UP.

Out of the share capital of Rs 180 crore, Rs 162 crore is being brought in by Honda of

 

Japan while Siel will invest Rs 18 crore.

However, the original agreement had envisaged that the equity will be distributed in the ratio of 60 and 40 per cent between the two partners.

According to details made available to Business Standard, Siel can buy back 30 per cent equity from Honda at face value by October 31, 1998.

The company has already indigenised parts covered under the first phase, and these have already been exported and tested in the Honda facilities in Japan, Thailand and Philippines.

The installed capacity in the first phase is 30,000 cars per annum on a two-shift basis. The initial model rolling out will be the 1.5 Sedan.

The company will generate direct employment for 1000 persons.

It plans to implement the 3S model of combining sales, service and spare parts from one centre.

The target date for completion of construction work is November 97, and the first car is to roll out in January '98.