Honda Motorcycle & Scooter India (HMSI) is likely to initiate production on the third line of its Gujarat Plant in the next two to three years. According to a recent report from PTI, the two-wheeler manufacturer took this step as demand has shrunk in the market due to coronavirus pandemic. The company commenced the construction activity of a third line to add six lakh units per annum at its Gujarat plant to increase total capacity to 12 lakh units per annum.
Yadvinder Singh Guleria, Director - Sales & Marketing, HMSI said, "As for our new line which we had made in our fourth factory in Gujarat, we call it our third line. The construction activity and other activities went on as per schedule. However, we have put on hold the decision on when to start production at that line because the overall market has shrunk. In terms of demand, the existing lines and existing capacity are good enough to take care of the demand, which is currently in the market and in the coming next two years or so."
He further said, "It depends on how quickly the market rebounds and the new demand shoots, green shoots visible to us. That is the only time we will decide to start production in the third line. From today's point of view, since the overall market condition is very fluid and a lot of unpredictability around, it looks like two to three years".
The company's business is majorly contributed by scooters which constitute 60 to 65 per cent while the remaining business comes from motorcycles. Currently, the two-wheeler maker has four production facilities across the country that are located at Manesar in Harayana, Tapukara in Rajasthan, Narsapura in Karnataka and Vithalapur in Gujarat. The total annual production capacity of all these four plants stand at 64 lakh units.
The company official said the Indian two-wheeler industry has been hit adversely due to the pandemic which is down by 25 per cent. While motorcycle and scooter segments are down by 22 per cent and 33 per cent respectively. However, the company had to face its challenges as the business is majorly driven from urban India, which had been in the lockdown for a significant number of days than the rural India that reflected on the business.