Honda Plans To Set Up World’s Largest Scooter Plant In Gujarat

It’s no secret that Honda wants to dethrone Hero MotoCorp to become India’s largest 2-wheeler manufacturer. The Japanese automaker’s plans of bringing motorcycles to tackle Hero hasn’t worked well as the Dream series is in no way able to outsell the popular Splendor. Honda has thus decided to use its scooter popularity to overtake Hero. The CBR250R maker is planning to set up the world’s largest scooter plant in Gujarat which will roll out 12 lakh units of its scooters every year. The company will invest Rs. 1100 crores in this upcoming plant in Ahmedabad, creating 3000 jobs.

Honda was among the first in the gear-less scooter segment and the company is the current leader in the scooter market, selling every second scooter with a market share of 53%. Honda already has three plants in India, with a total capacity to churn out 46 lakh units per annum. With the new scooter plant, the annual production capacity will increase to 58 lakh units! This new plant will commence production by 2016. 27% of total 2-wheeler sales come from scooters while majority of Honda sales come from the Activa, the scooter selling almost 1.8 lakh units last month.

The high demand for the Honda Activa has resulted in a long waiting period for the scooter, the company has a backlog of 60,000 units currently. The recently launched Activa 125 has been very successful and commands a waiting period of almost six months in certain cities. Currently India is Honda’s second biggest 2-wheeler market and with the set up of this new scooter plant, it will become their bigger market in the world. It’s not only Honda but other manufacturers are also seeing a tremendous increase in demand of scooters. TVS was able to overtake Bajaj Auto solely because of rising scooter sales.

Source – Economic Times