Honda Cars to commission second plant at Tapukara in Q2 FY17

Japanese car major Honda India today said its brownfield expansion at Tapukara in Rajasthan is on course and the Rs 380-crore plant would be commissioned in the second quarter, which would take its total capacity to 3 lakh units from the present 2.4 lakh.

"We are on course with Tapukara expansion. The work would be completed in the summer of this year," Honda Cars India President and Chief Executive Yoichiro Ueno said after launhcing its first compact SUV 'Honda BRV' here.

Honda had announced the expansion of the Tapukara plant in March 2015. The present plant has a capacity of 1.20 lakh units which would go up to 1.80 lakh. The company also has a 1.2 lakh-units plant at Greater Noida. This expansion is part of the Rs 2,500-crore capex it had announced in 2013.

The Tapukara plant was commissioned in February 2014 with an annual capacity of 1,20,000 units. The plant integrates various functions like forging, casting, stamping, powertrain components production, welding, painting, resin moulding, engine and frame assembly, apart from engine testing.

When asked about the capex plan for FY17, Ueno said there is no investment in the pipeline as they have already made investment commitments till 2017.

While the price of the 1.5-L petrol model in five variants comes in the range of Rs 8.75 lakh to Rs 11.99 lakh, the same capacity diesel model comes in four variants in a range of Rs 9.90 lakh to Rs 12.90 lakh ex-showroom, Mumbai.

The 7-seater BRV is pitched against the Hyundai Creta, the market leader Renault Duster and the Nissan Terrano, which are also priced in the same range but are all 5-seaters. Also, the BRV is larger than the Maruti's Vitara Brezza, Mahindra's TUV300 and Ford EcoSport.

For Honda, this is their first compact SUV, which is the fastest growing category in the SUV space which grew 43 per cent in FY16. Though the BRV is an all-new model, it's the same platform seen on the Honda Brio (hatchback), and its not-so-successful Mobilio and also its compact sedan Amaze.

Honda India Sales and Marketing Chief Jnaneswar Sen said Honda would have 340 sales points by March from 298 currently.

On localisation content in the BRV, Sen said it is the highest at 94 per cent and all the models have on an average 90 per cent local sources.

On capacity utilistion levels, Ueno said it was 83 per cent last fiscal with sales including exports touching 2 lakh units during the period. Out of this, local sales stood at 1.92 lakh. Ueno also ruled out shipping the BRV immediately.

On where Honda India stands within the group, Sen said in terms of revenue, India is the fourth largest for the group with the US being the largest, followed by China and Japan.

However, Ueno was quick to add that the gap between Japan and India, though large, is narrowing fast. He did not offer a likely timeframe as to when India will overtake Japan.