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Mumbai:
Honda Motor Co., Japan''s second-biggest carmaker, will set up its second manufacturing
unit in India at Alwar, Rajasthan, which will start production of its first small
car model in India in 2009. >Honda
Siel Cars India (HSCI), a joint venture between Honda Motor Co. and Siddharth
Shriram group firm Siel Ltd, has signed a memorandum of understanding with the
Rajasthan state government for setting up the Rs1,000 crore plant. >The
new plant is scheduled to be commissioned during October-December 2009 and would
have an initial capacity of 60,000 units per annum, said Masahiro Takadegawa,
president and CEO of HSCI. "We plan to manufacture two models from
the plant. One model will be a new small car and the second will be from our existing
line-up." The company, he said, would invest an additional Rs1,000
crore for raising capacity to over 200,000 units per annum after 2009. He, however,
did not disclose the details of the small car that would be rolled out of the
plant. Honda Siel has its existing car plant in Greater Noida, Uttar
Pradesh. >Honda
expects the introduction of a small car to boost its presence in Asia''s fourth-biggest
auto market, where annual sales are forecast to triple to 3 million units by 2016.
Honda will compete with Suzuki Motor Co. and Hyundai Motor Co., who together control
about 70 per cent of India''s one-million-unit a year car market mainly from hatchback
sales. >``We
have several options, and a couple of them we are developing from scratch,'''' Takedagawa
said. ``We are now in the premium segment, which is 20 per cent of entire market;
hatchbacks are 80 per cent of entire market.'''' >Honda''s
cars in India are priced higher than equivalent models from other companies. Honda
may change its pricing strategy when it starts selling small cars in India. >Honda
joins Nissan Motor Co., General Motors, Volkswagen and other
automakers that are expanding factories or building new factories in India where
automakers last year announced a combined investment of over $5 billion by 2012.
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