Honda Siel Cars India has started construction of its second plant, located in the Tapukara industrial area, about 120km (75 miles) from its current plant at Greater Noida and 70km (40 miles) from Delhi.

HSCI's new facility occupies a 600-acre site and will have an initial production capacity of 60,000 units per year, with an investment of about INR1,000 crore ($US230m). The work on the new plant begins with construction of the press shop.

A traditional Indian ceremony was held to mark the occasion.

Honda Motor chairman Satoshi Aoki said: "For Honda, India is an important market, which holds great potential for future growth. We are focused on investing in India to participate in and contribute to its growth."

The the plant is expected to begin operations by 2009. The new project will also have a designated 150-acre area for suppliers.

HSCI will use the latest technologies in the new plant to provide flexibility to produce models more quickly and efficiently.

Major processes will include a press shop, a weld shop, die-casting shop, machine shop, paint shop and assembly operations.

The new plant will be modelled on the lines of Honda's latest global plants with great emphasis on environment protection and safety and will create employment for over 1,000 people in the first phase.