JAIPUR, India, May 3, 2007 – Honda Siel Cars India Ltd. (HSCI) unveiled a detailed, long-term plan for its new manufacturing facility in Rajasthan, to be set up in the Alwar district, with an initial investment of over Rs 1,000 crore (US$230 million).

A Memorandum of Understanding was signed between HSCI and the Rajasthan government for setting up the second Honda car plant in India. The MoU was signed by Masahiro Takedagawa, HSCI President and CEO, and Ashok Sampatram, Principal Secretary (Industries), Rajasthan government, in the presence of Rajasthan Chief Minister, Vasundhara Raje, the state Industries Minister, Narpat Singh Rajvi and other senior government and HSCI officials.

As per the long-term plan unveiled at the ceremony, the new project would be spread across 600 acres of land and will have an initial production capacity of 60,000 units per annum.

In addition to the car manufacturing facility, which will be spread across 400 acres, the new project will also have several supplier units, spread across an area of over 150 acres.  The planned capacity of the plant is likely to go up to over 200,000 units per annum, with investments up to Rs 2,000 crore ($460 million) in the future. The plant is scheduled to roll out the first car by the last quarter of the calendar year 2009.

Honda Siel Cars India’s current manufacturing unit at Greater Noida, Uttar Pradesh, has a production capacity of 50,000 units which will be expanded to 100,000 units by the end of this year. With the new Greenfield project in Rajasthan, HSCI’s total capacity will increase to more than 150,000 units by 2010.

At the proposed plant, HSCI will deploy state-of-the-art technologies that provide the flexibility to produce models more quickly and efficiently. Major processes at the plant will include a press shop, a weld shop, die-casting shop, machine shop, paint shop and assembly operations. The new plant will be modeled on the lines of its latest global plants with great emphasis on environment protection and safety.  

The plant will operate under the stringent standards of ISO 9001 for quality management and ISO 14001 for environment management.

M. Takedagawa, President & CEO, Honda Siel Cars India Ltd. said, “Signing of this MoU marks an important day in the history of HSCI. It has been an extremely successful journey for Honda in India and with the proposed plant we plan to foray into volume segment – the compact car segment.”

Giving the rationale behind choosing Rajasthan for its second unit Takedagawa said, “North India comprises 40% of our total sales; so proximity to this market was a big consideration for us. Moreover, with the first plant located in Uttar Pradesh, logistically too the new plant will be convenient for us. The State Government’s proactive support and the encouraging investment climate were some of the other major factors in the decision.”

Honda aims to contribute significantly towards the economic development of Rajasthan by creating large-scale employment opportunities and the associated economic development of the adjoining areas. It will also look at upgrading the local Industrial Training Institutes in and around the new plant and would be prepared to absorb qualified and skilled students from there for its unit.

While setting up the plant, HSCI will also follow Honda’s global standards in ensuring protection of the surrounding environment, ecological balance and conservation of natural resources.