Honda Motorcycle & Scooter India Pvt Ltd (HMSI) is thinking about establishing its 2nd plant in Rajasthan. It plans to invest a sum of Rs 1,100 crore (Rs 11 billion) and the plant will have a capacity of manufacturing 12 lakh units per year.
A top government official said, “Keeping in view the economic and financial environment of the state, the Cabinet has granted its approval for granting a customised package to the company (HMSI)”.
The construction activity is expected to commence within this month, said the official. Though HMSI officials could not confirm the development, the Rajasthan government official said the company will establish the factory near Bhiwadi with a start-up ability of 6 lakh units per year during the initial phase with an investment of Rs 500 crore (Rs 5 billion) during a tenure of 5 years.
The company plans to increase the capacity to 12 lakh units per year, which may require an extra investment of Rs 600 crore (Rs 6 billion) during the 2nd phase, the official said. At present, HMSI produces 2 wheelers at Manesar in Haryana with a capacity of 15.5 lakh units per year.
The company manufactures scootersActiva and Dio besides bikes like Unicorn, Shine and CBF Stunner from its Manesar factory.
With low rates on car loans, HMSI can expect to increase its sales rapidly.