INDIA BUSINESS WORLD - JULY 2006
THE MONTH THAT WAS...

DHOOTS DAEWOO DEAL'S ON

HONDA Japan will invest another Rs 3,000 crore in India across all its operations in the next 10 years. The company will also kick off a new parts business called Honda Motor India, which will be headed by Masahiro Takedagawa, president and CEO of Honda Siel. Mr Takedagawa will also co-ordinate Honda's different businesses in India . Honda is also aggressively looking at setting up a new plant for bringing in its small car to India . “In the last 20 years, we have invested around Rs 30 billion and would make investments of a similar amount in the next 10 years in all the three operations,” said Takeo Fukui, CEO, Honda Motor Co.

Speaking about Honda's small car plans in India , Mr Takedagawa said: “The India government's recent policy has given clear indication towards what is a worldwide trend—that is moving towards the small car. We are very aggressively studying and evaluating options to enter the largest segments of car in India .”

He said the small car would require a new plant. “Our facilities at Greater Noida will support production of our three products — City, Civic and Accord. But for getting the small car we would have to establish a new production facility,” he added. He also indicated that Honda Siel is look ing aggressively at expanding the sale of the existing models, by introducing a model smaller than the City ZX. As for its parent, Honda Motor is bullish on the Indian market. “I personally feel that the Indian market would soon become more important than China as India‘s growth rate and population is becoming similar to China,” said Mr Fukui.

The company, which believes in “starting small and becoming big”, is aiming to increase its car sales by about three time to 1,50,000 units by 2010. “For 2006, we expect to sell 62,000 units of cars and hope to clock a growth of 48%,” Mr Takedagawa added.