Honda may start rolling out cars from Rajasthan unit in 2-3 years

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Japanese car-maker Honda expects its second Indian facility at Tapukara, in Rajasthan, to start rolling out vehicles within the next 2-3 years after being put on hold indefinitely due to the global slowdown of 2008.

The company, which is present in India through a joint venture with the Siel Group, had partially opened the Tapukara plant in 2008 for the manufacture of components.

"Our first aim is to fully utilise the capacity of the Greater Noida facility and only after that we will consider starting assembly at Tapukara. I think we will be able to do that in the next 2-3 years," Honda Siel Cars India Director (Marketing) Seki Inaba told PTI.

The company's first facility at Greater Noida, set up for Rs 450 crore in 1997, has an installed production capacity of one lakh units per annum and can produce up to 1.2 lakh units by improving the efficiencies of different verticals, he added.

HSCI had committed an investment of Rs 1,000 crore to set up the facility at Tapukara with an installed capacity 60,000 units per annum.

In September, 2008, it had partially opened the plant to start stamping operations and produce few parts for domestic and export markets.

Last year, the company announced a further investment of Rs 250 crore on the Tapukara facility to expand the power train unit, primarily to cater to its upcoming small car, 'Brio'.

It currently rolls out engine and transmission components such as cylinder heads and cylinder blocks.

Earlier, in 2010, HSCI had stated that it was likely to start car assembly operations at Tapukara from 2012.

When asked about sales expectations for this year, Inaba said: "We have suffered this year due to the tsunami in Japan and had to cut our production by half for several months. Still we are expecting to cross the last year's numbers."

HSCI sold 59,463 units during 2010-11, as against 61,815 units in the previous fiscal.

The company has now geared up to launch its much-awaited small car, 'Brio'. The car will hit the roads next month and will be priced below Rs 5 lakh.

Facing tremendous competition from its rivals, HSCI had last week slashed the prices of its premium hatchback 'Jazz' by over Rs 1.5 lakh in comparison to the older version.

It had also cut the prices of its flagship sedan, 'City', by up to Rs 6,000 in June after implementing various cost reduction measures.