Hero Honda, India's largest two-wheeler manufacturer has revealed plans to build a fourth plant in the country. In a statement, the company has said it would reveal the location of its fourth plant and the investment it is going to make.
Gujarat and Karnataka have emerged as the top two contenders where Hero Honda will set up its fourth plant. Hero Honda Motors senior vice-president (marketing and sales) Anil Dua said: “ For 2012-13, we will certainly need a fourth plant. In the next few weeks or months, we will be talking about the fourth plant." Mr Dua did not elaborate on the plant's production capacity.
Hero Honda had earlier revealed a capex of Rs.800 crores and a majority of the fund will be used to set up the fourth plant. A company source has revealed Hero Honda had short listed sites at Gujarat and Karnataka after considering ten different states.
Hero Honda was supposed to announce plans for its fourth plant last year itself. However the decision was shelved following the end of the joint venture between Hero India and Honda. Hero Honda currently ha three plants in Dharuhera and Gurgaon, in Haryana, and Haridwar, in Uttarakhand.
Hero Honda is aiming to sell six million two-wheelers in India this year. It had sold 54,02,444 motorcycles and scooters in the previous financial year. Hero Honda shares rose 0.90% Rs 1,863 after the company announced its plans for a fourth plant.
Honda Motors is also looking at a dominant position in the Indian two-wheeler market and is aiming to increase its production capacity. India's second largest two-wheeler manufacturer Bajaj Auto has also made plans to boost production.