Honda Motorcycle and Scooter India (HMSI) will set up its fourth plant in Karnataka at an investment of Rs 800 crore. This will see the total capacity of the company go up to nearly 6 million units.

An official with the Karnataka Government said that Honda has received necessary approvals to set up the fourth plant at Narsapur, near Bangalore. The third plant is also located at the same site and has a capacity to produce 1.8 million units. The investment for the third plant is around Rs 1,200 crore in the Government-allocated 96-acre site.

The first plant, with a capacity of 1.6 million units, is located in Manesar in Haryana and the second plant — with a capacity of 1.2 million units — is located in Tapukara in Rajasthan.

ANCILLARY UNITS

The official said the ancillary units around the Honda plant will invest a total of Rs 1,200 crore to manufacture parts for the main unit. The Honda plant will generate jobs for around 5,000 people.

The company had earlier told Business Line that India will be its biggest global market for two wheelers by 2015. It will account for about 30 per cent of its overall market share, which is now at about 13 per cent.

Honda was earlier looking at setting up the fourth plant in Gujarat but it eventually decided to set up the fourth plant in Karnataka itself. The State Government recently offered tax concessions to Honda for the plant, which includes 40 per cent value added tax payable by the company to the Government as interest-free loan for up to 10 years. The cabinet has also cleared 95 per cent reimbursement of CST for a period of five years and waiver of 100 per cent of land registration cost as well.

HMSI officials had earlier said that the product line-up for the Karnataka plant include, three models of automatic scooters and six motorcycles in 100 cc to 250 cc range.

kgiriprakash@thehindu.co.in

source: http://www.TheHinduBusinessLine.com / Companies / by K. GiriPrakash / Bangalore, February 28th, 2012