MONDAY, DECEMBER 20, 2004
Honda will invest Rs 134 crore to double production
TIMES NEWS NETWORK
NEW DELHI: Honda Motor Company on Monday announced plans to invest Rs 134 crore in India to nearly double its car production capacity in view of the surging demand in the market. Car sales in India have been on a high for well over a year, fuelled mainly by rising income among professionals and low rates for vehicle loans.
The firm announced that it will invest $30.28 million to expand annual production capacity at its Indian subsidiary — Honda Siel Cars India — to 50,000 units from the current 30,000 by 2005-end.
The firm said it expected vehicle sales in India to reach 1.35 million units in 2004, up 24 per cent from a year earlier, thanks to a healthy economy.
Honda produces the City mid-sized car and Accord premium sedan in India. Besides, it also imports and sells the CR-v sports utility vehicle.
Honda president and CEO Takeo Fukui had last week announced that the firm is trying to synergise operations at its India plant with the Honda unit in Thailand to reap maximum benefits from the new Indo-Thai free-trade agreement (FTA).
Japan's third largest auto maker further said its global car sales are expected to rise 8% to 3.4 million units in 2005 as it expands output in the US and China.
It expects motorcycles sales to jump 17 per cent to 12.5 million units worldwide, after a 23 per cent rise in 2004 to about 10.7 million. For 2004, Honda estimates its worldwide car sales to total 3.16 million units, up 9 per cent. It would be the first time the company’s car sales have exceeded 3 million. "We will continue developing a strong corporate structure to buffer the company from exchange rate fluctuations and other changes," Fukui said in Japan.
Besides Honda Siel Cars, Honda's Indian operations include two JVs — Hero Honda Motors and Honda Siel Power Products — and a subsidiary Honda Motorcycle and Scooter India.
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