Honda to Build Second Motorcycle Production Plant in India

New Delhi, March 09, 2010

Honda Motorcycle & Scooter India Private Limited. (HMSI), Honda’s wholly-owned motorcycle production and sales subsidiary in India, today announced plans to build a second motorcycle production plant to meet
increasing demand in the rapidly growing motorcycle market in India

To build the second plant, HMSI will acquire approximately 240,000 square meters of land within the Tapukara Industrial Area (Near Bhiwadi), Rajasthan, which is approximately 40km from the existing plant and approximately 90km from Delhi. The new plant is scheduled to become operational in the 2nd half of 2011 with annual production capacity of 600,000 units. Further, HMSI is expanding annual production capacity of its existing plant from the current 1.25 million units to 1.55 million units by the end of this month, with a further expansion to 1.6 million units already scheduled for next year. As a result, HMSI’s total annual production capacity will be 2.2 million units when the second plant becomes operational. The new plant will employ approximately 2,000 associates at initial stage of full capacity. The total investment will be approximately Rs. 4.7 billion (approximately 8.9 billion yen*).

*1 Rupee = approximately 1.9yen

Utilizing production technologies refined at the existing plant as a starting point, HMSI will strive to improve process ergonomics and employ more advanced automation and other measures to its second plant. It will also be more environmentally responsible plant by proactively reducing energy consumption during production and by employing other environmental measures such as water recycling.

India represents the world’s second largest motorcycle market behind only China, and industry-wide motorcycle sales in India for 2009 reached 8.8 million units (up 19% compared to 2008). HMSI was established as a wholly-owned motorcycle production and sales subsidiary of Honda in 1999 and began production in 2001. HMSI’s sales have grown steadily with 2009 sales of approximately 1.1 million units (up 11% compared to 2008) achieving a record high for nine consecutive years.

In order to fulfill the diversifying needs of customers in the growing market of India, HMSI is enhancing its product lineup with last year’s full model change of the Activa 110cc scooter, one of the company’s best-selling products, and by introducing the CB Twister 110cc motorcycle in February 2010 in the 100-110cc market segment, which accounts for approximately 50% of total motorcycle market. The decision to build the second motorcycle production plant was made to better accommodate a further increase in demand in India.

About HMSI’s plants

First plant (existing plant) Second plant
Location IMT** Manesar,
Gurgaon District, Haryana 		Tapukara industrial area,
Alwar District, Rajasthan
Employment Approximately 6,500 associate
(as of the end of February 2010) 		Approximately 2,000 associates
(at initial stage of full-capacity)
Annual Production Capacity 1.55 million units
(as of the end of March 2010) 		600,000 units (initially)
Land Size 210,000 m2 240,000 m2
Production Models ・Scooter: Activa, Dio, Aviator
・Motorcycle: Unicorn, Shine, CBF Stunner, CB Twister 		Motorcycle models (plan)

About Honda Motorcycle & Scooter India (Pvt.) Ltd.

Establishment: August 1999
Location IMT*2 Manesar, Gurgaon District, Haryana state, India
Capital: Rs. 3 billion (approximately 5.7 billion yen)
Capitalization Ratio: 100% Honda Motor Co., Ltd.
Representative: Mr. Shinji Aoyama, President & CEO
Business Activities: ・Production and sales of motorcycles and scooters
Dealership locations: 725 locations (as of February 2010)

** IMT=Industrial Model Township

Sales Growth:
(Domestic+Export)

FY 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 (F,Cast) 10-11(F,Cast)
Sales Volume 55000 166300 341400 551080 600570 715280 907200 1,070,250 1,250,000 1,500,000
Growth (YoY) 200% 105% 61% 9% 19% 27% 18% 17% 20%
Cumm.(In’000) 55.5 221.8 563.2 1114.3 1714.9 2430.1 3337.3 4407.6 5657.6 7157.6

Keeping the momentum of 1.07 Million units sales in 2008-09, HMSI is progressing well to surpass 1.25 million units plan in financial year 2009-10 with a growth of 17%. HMSI unveiled sales plan of 1.5 million units in next financial year 2010-11 with a growth of 20% over current fiscal.

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