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May 26, 2011

Honda to Expand Annual Motorcycle Production Capacity in India through Expansion of Second Plant and Construction of Third Plant

Haryana state, India, May 26, 2011 - Honda Motorcycle & Scooter India (Pvt.) Ltd. (HMSI), Honda's wholly-owned motorcycle production and sales subsidiary in India, announced plans to expand production capacity of its second motorcycle production plant, which is currently under construction, and to build a third motorcycle production plant to meet increasing demand in the rapidly growing motorcycle market in India.

The second plant is currently being built in the Tapukara Industrial Area of Rajasthan, which is approximately 90km from the center of Delhi, and is scheduled to become operational in July 2011 with annual production capacity of 0.6 million units. HMSI decided to double the annual production capacity of this plant to 1.2 million units in March 2012. Utilizing production technologies refined at the first plant as a starting point, HMSI will strive to improve process ergonomics and employ more advanced automation and other measures to reduce the burden on associates at the second plant. It will also be more environmentally responsible plant by proactively reducing energy consumption during production and by employing other environmental measures such as water recycling.

In order to realize Honda's vision to provide good products with speed and affordability, the third plant will be built in the Bangalore area in the southern part of India, which will enable HMSI to more efficiently serve the vast motorcycle market of India together with the first and second plants in northern India. The third plant is scheduled to become operational in the first half of 2013, with annual production capacity of 1.2 million units.

This capacity expansion plan will increase HMSI's total annual production capacity to 4 million units, including 1.6 million units at the first plant, 1.2 million units at the second plant and 1.2 million units at the third plant, preparing HMSI for further and rapid growth of the market.

India represents the world's second largest motorcycle market behind only China, and industry-wide motorcycle sales in India for 2010 reached 11.32 million units (up 30% compared to 2009). HMSI was established as a wholly-owned motorcycle production and sales subsidiary of Honda in 1999 and began production in 2001. HMSI's sales have grown steadily with 2010 sales of approximately 1.526 million units (up 40% compared to 2009) achieving a record high for ten consecutive years.

In order to fulfill the diversifying needs of customers in the growing market of India, HMSI is enhancing its product lineup with last year's introduction of CB Unicorn Dazzler, its first model in the 150cc class that was targeted toward young consumers, and by introducing CBR250R, HMSI's first 250cc sports bike. HMSI will continue fulfilling the expectations of its customers by enhancing its product lineup and expanding the production capacity.

HMSI annual production capacity

  Fist plant Second plant Third plant Total capacity
As of May 2011 1.6M units -- -- 1.6M units
July 2011 1.6M units 0.6M units -- 2.2M units
March 2012 1.6M units 1.2M units -- 2.8M units
1st half of 2013 1.6M units 1.2M units 1.2M units 4.0M units

About HMSI plants

  First plant Second plant Third plant
Location IMT* Manesar,
Gurgaon District, Haryana
Tapukara Industrial Area, Alwar District, Rajasthan Narsapuram Area, Karnataka
Annual production capacity 1.6 million units
(as of the end of May 2011)
0.6 million units (initially)
1.2 million units
(at full capacity)
1.2 million units
(at the start of operation)
Lot size 210,000 m2 240,000 m2 350,000 m2
Production models
(Plans for second and third plants)
-Scooter: Activa, Dio,
Aviator
-Motorcycle:
CB Unicorn,
CB Shine,
CBF Stunner,
CB Twister
-Scooter: Activa
-Motorcycle:
CB Twister,
CB Shine
-Scooter: Activa
-Motorcycle:
CB Twister,
CB Shine

About Honda Motorcycle & Scooter India (Pvt.) Ltd.

Establishment: August 1999
Head office: IMT* Manesar, Gurgaon District, Haryana state, India
Capital: 3 billion Rupee (approximately 5.4 billion yen,1 rupee = 1.8 yen)
Capitalization Ratio: 100% Honda Motor Co., Ltd.
Representative: Keita Muramatsu, President & CEO
Business Activities: Production and sales of motorcycles and scooters
Dealership locations: 826 locations (as of March 2011)
IMT = Industrial Model Township

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