The world’s largest Honda scooter plant to come up in Gujarat

Honda may not have done all that well in the motorcycle segment but its scooters certainly rule the road leaving Bajaj, TVS, Suzuki, M&M and Yamaha eating dust. Ever since its introduction in 2001 Honda’s Activa has reigned, the undisputed favourite of men and women all over the country.

So upbeat is Honda about its scooter segment that it now plans to set up the world’s largest scooter plant nowhere else but in Gujarat, with an annual capacity of 12 lakh units. In focus is its latest unisex model that has outraced all other scoots on the road to become universally popular.

Despite the introduction of so many motorcycles, scooters continue to remain popular as is evidenced by scooter sales that showed a leap of 29% in the current year. Scooters account for 27% of the two wheeler market and have made a strong comeback from the measly 8% only a decade ago. Demand is rising and people have to actually book and wait for their Activa or the four other models on offer. Even doubling capacity in the existing plant has not helped match demand. This has prompted Honda to consider a dedicated scooter plant in Ahmedabad at a cost of around Rs. 1100 crores. The plant would create 3000 jobs and would be the company’s fourth, bringing the total production capacity to 58 lakh scooters by 2016. According to Y S Guleria, VP for marketing at Honda, there is a backlog of 60,000 scooters with even more bookings expected in the ensuing festive season. It is not just Honda that is seeing a rise in demand for scooters. The other players, Hero, Yamaha, Suzuki, M&M and TVS are also making plans to expand production to meet rising demand for two wheelers in India. Scooter sales reached 1.01 million between April and June. Overall, during the last financial year, India saw a record 3.6 million scooters sold to eager consumers who possibly like the convenience, automatic features and fashion styling of the current offerings. Automatics are notorious for poor mileage but the new generation of scooters do better and are designed for unisex, appealing to guys and gals as well as mature adults.

Honda has a market share of 53% in India. This gives the Indian subsidiary second spot in Honda’s worldwide two wheeler operations. The proposed plant in Ahmedabad would translate to India becoming Honda’s top two wheeler market. Honda expects to manufacture over 12 lakh scooters in this plant. Its Haryana unit manufactures 16 lakh units, the Karnataka plant rolls out 18 lakh units and the Rajasthan unit produces 12 lakh units.