Honda Cars India is reportedly working on a third plant in Gujarat. It is aimed at exports. This plan was announced by the company’s senior vice president (marketing and sales) Jnaneshwar Sen. Honda currently has a plant in Greater Noida and Tapukara, Rajasthan with a total production capacity of 2.4 lakh units per annum.
"The land acquisition is at a very preliminary phase. The third plant is part of Honda's long-term commitment to the Indian market. We are yet to finalise the plans for the third plant and the entire process is at a very preliminary stage," he said on the sidelines of the annual convention of Society of Indian Automobile Manufacturers' in Delhi on September 13, 2014.
Honda is also planning to add a second shift at its Tapukara plant to increase the capacity to cater to the demand for its vehicles.
India’s third largest carmaker is in the midst of a production crisis, but this was long predicted by us as Honda has been sluggish in making production decisions. Although, it is reported that the third plant will be built with export markets in sight, we believe this plant will also add to local volumes. Currently, Honda has three hot selling vehicles – Amaze compact sedan, the City sedan and the Mobilio MPV. Honda City has been doing a steady 7,000 units on the sales chart, the Amaze had been at the same mark and the Mobilio too so far. Demand for these three products combined exceed the company’s production capacity of 2.4 lakh units. Even with the additional shift it will be difficult to cater to the market if they launch a Brio-based crossover in the market. This is where the third plant might help apart from exports.