IN - Honda Cars India to sign new plant agreement with Gujarat in one month

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As Gujarat turns into the new automobile hub, Honda Cars India also plans a new car manufacturing plant in the state.

With Tata Motors, Ford India and Maruti Suzuki all setting up shop in Gujarat, Japanese automaker Honda’s Indian subsidiary Honda Cars India have also shown interest in the region.

Set to sign a deal with the Gujarat Government in the next one month, the Honda Cars India Gujarat plant is being planned in Vithalapur at a distance of 80 kms from Ahmedabad. Land for the project is being sourced while the company is in contact with Industry Extension Bureau (IndextB).

Honda Gujarat plant in Vithalapur is expected to see investments to the tune of INR 4,000 crores which will be in a phased manner. The first phase will see an initial investment of INR 2,200-2,500 crores, while the remaining will follow in second phase. The upcoming plant will have capacity of 1 to 1.25 lakh units per annum and will be set up under the ‘Mega Project’ category of Industrial Policy of the state government.

This new Honda plant in Vithalpur, Gujarat is the Japanese company’s second investment in the area after Honda Motorcycle and Scooter India (HMSI) conducted the groundbreaking ceremony for a new scooter manufacturing unit in Vithalpur in October 2014. The new unit is spread over an area of 250 acres and will have capacity to produce 12 lakh units per annum. Completion and commissioning of the unit is scheduled for later this year.

For Honda Cars India, their current capacity stands at 240,000 units per annum – 120,000 units each from their two existing plants, one in Greater Noida and one in Tapukara. The new Tapukara plant will increase capacity to 180,000 by mid 2016 as announced by the company in May 2015. This will take the total car production capacity of Honda Cars India to 300,000 units per annum. Once the Gujarat plant is commissioned, capacity will increase to 420,000 units per annum. This increased capacity will help Honda Cars India to launch newer products (like the Brio based SUV), meet local demand and also increase exports.