Honda to set-up a new plant in India by 2011

Honda Siel Cars India (HSCI), a subsidiary of Japan based leading car-maker, is mulling over to invest as much as Rs 300 crore in the establishment of its second engine & transmission components manufacturing plant in India, as per a statement given by a top official of the company to a leading Indian business news daily. The prospective plant will be established at Tapukara Rajasthan.

According to Mr Takashi Nagai, HSCI president and CEO, the company aims to improve financial yields along with cutting down the manufacturing costs of its cars in India. He also added that the company will identify more critical parts to be manufactured locally.

At present, the company imports the critical auto parts from countries like Indonesia and Thailand and making spare parts locally could fall 15-20% cheaper as compared to the currently imported components. The new plant will start functioning by the first quarter of next year and will help the company in producing volumes in the compact-car segment of India.

Honda cars in India have always been among the highly priced ones in their respective segments such as Honda Jazz which is the highest-priced premium hatchback in the country. The new plant will certainly help the company in lowering-down the price of these models in India considerably so that they can be made more competitive and attractive.

The company had inaugurated its first plant in India last year but the 600-acre facility remained underutilised due to the economic downturn at  that time, which resulted in a comparatively moderate performance of the company in the Indian market.

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