Report - Honda to establish world's largest scooter plant in Gujarat

Honda Motorcycle & Scooter India (HMSI) fielded the Honda Activa in 2001 at a time when the Indian two wheeler market was considered to be an inhospitable place for scooters. However, the Activa lead the rise of automatic scooters in India, creating a stellar brand image for itself in the process.

Into its second generation, the automatic scooter which is now available in 110 cc and 125 cc avatars is sitting on a long list of orders. And that despite Honda increasing its scooter production capacity recently. Apart from the Activa, the Dio is a brisk seller too.

In order to meet the surging demand for scooters, HMSI is all set to establish what would become the world's largest scooter manufacturing plant in Ahmedabad, Gujarat, reports Economic Times. With two assembly lines fully dedicated to build scooters, the proposed plant would have an annual production capacity of 12 lakh units.

The new plant would take HMSI's cumulative capacity to 58 lakh units (16 lakh units from the Haryana plant, 12 lakh units from the Rajasthan plant and 18 lakh units from the Karnataka plant). Honda will invest INR 1,100 cr in the new project which is estimated to create 3,000 new jobs.

Scooters constituted almost 25% of the entire Indian two wheeler market last fiscal and the number has already gone up to 27% so far this fiscal. The unisex appeal and city-friendly character of the automatic scooters have started to catch the fancy of an increasing number of buyers, as evident from the growth rate of 23% in the April - June 2014 quarter.

Honda has a dominating market share of 53% in the Indian scooter market, and India has already become the Japanese auto giant's second biggest two wheeler market.

[Source: Economic Times]