Honda India to invest in plant, release new models

NEW DELHI (Reuters) - Honda Motor Co Ltd will invest $255 million in a second Indian plant by end-2009, and plans to bring both a hybrid version of its Civic sedan and the compact Jazz to the fast-growing market.

The Japanese automaker has about 4 percent of Indian car sales, offloading 42,365 in the nine months to December. Over two-thirds of its sales were of the mid-sized City, the remainder made up by the Civic and the Accord.

The investment will be poured into the plant Honda is building in the western state of Rajasthan, Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd, said at an auto show in the Indian capital.

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"Rajasthan will be a full-scale plant ... By the end of 2009, we will invest 10 billion rupees ($255 million)," Takedagawa said, adding the new plant would be completed by the end of that year.

Honda has a manufacturing plant in Greater Noida, near New Delhi, with an annual capacity of about 60,000 units. That is set to rise to 100,000 by the end of January.

With the launch of the Jazz, also by end-2009, Honda will enter the compact car segment, which makes up more than two-thirds of India's domestic car sales. By 2010 India is expected to see annual sales of 2 million units in the segment.

The Jazz will be made in India and 80 percent of the parts for the car will be sourced locally, Takedagawa said.

Honda will ramp up its dealer network in India to 100 from the current 66 by March 2008, he said, adding Honda cars will sell in about 70 cities by then.