Honda to unleash a scooter wave from Gujarat plant

Youth power coupled with an increasing preference for scooters has prompted Honda Motorcycle & Scooter India to set the up its largest all-scooter facility in Gujarat.

With three manufacturing facilities already in place with a combined capacity of 4.6 million units spread across Haryana, Rajasthan and Karnataka, HMSI still faces an order backlog of 30,000 scooters. It is keeping this in mind that it set up its fourth plant.

The Gujarat facility was readied in just 15 months and will kick off with an initial capacity of six lakh scooters per annum, going up to 1.2 million units by mid-2016. Once it is fully operational, HMSI's total capacity will be 5.8 million units per annum.

Of its total sales of about 4.45 million units (both domestic and exports), scooters take up a 60 per cent share. "India contributes to about 25 per cent of Honda's global sales of 17.5 million two-wheelers," said Keita Muramatsu, President and CEO. Thus far, HMSI has invested ₹7,400 crore in India, including the Gujarat facility.

The company believes that in the current slack scenario for two-wheelers, scooters are still fuelling demand and contribute to about 30 per cent of total sales in India. This component is expected to increase to 35-40 per cent in the next 3-5 years.

"During April-January of this fiscal, the overall two-wheeler market has fallen by about one per cent. While motorcycles have dropped by two per cent, scooters have shown robust growth of about 12 per cent," said YS Guleria, Senior Vice-President, Sales & Marketing.

Spread across 250 acres at an investment of about ₹1,100 crore, the Gujarat plant will be home to the Activa and Dio. "We see scooter demand growing faster in the coming months and this facility will help meet this requirement,” said V Sridhar, Senior VP & Director, Corporate Office Production. He added that production processes were flexible enough to switch to making motorcycles keeping in line with potential demand.

The plant has several firsts for the company in India. These include an automated guided vehicle (AGV) for movement of materials inside the plant; high pressure vaccum cooling for better productivity and efficiency; and a noise chamber to detect abnormal engine noise. Twenty two vendors have set up operations near the plant.

"Each time we plan a facility, we try to implement new initiatives. AGV, which has been widely used by the four-wheeler industry, will help in material movement while reducing worker fatigue and improving their productivity," said Sridhar.

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