Honda plans to double its production capacity in India by next year, set up a fully owned subsidary and pump US$650 million into its business there over the next decade, according to an AP report.
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President and CEO Takeo Fukui said Honda sees India as a more important market than China, and the growth potential here is the highest.
Fukui told reporters that expanding business in India is one of Honda’s three key global strategies, together with strengthening the foundation of our business in the US and Japan, and enhancing Honda’s leadership commitment to protect the environment.
But Honda is not rushing to invest huge sums into India.
Fukui said Honda usually prefers to scale up its operation step by step as it did in other places including the United States. “In Honda, we say: ‘start small and grow big’.”
Its auto plant in Greater Noida, near New Delhi, currently has annual production capacity of 50,000 cars.
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By GlobalData“By the end of next year, we will double this annual capacity to 100,000,” Fukui said.
The launch of the Civic model coupled with plans to bring a small car in India will help Honda triple its annual sales to 150,000 by 2010, Fukui said.
Meanwhile, the company has decided to establish a new, fully owned subsidiary to consolidate its business, Fukui said, in what appeared to be the first move toward building independent business operations here.
