Honda Motorcycle & Scooter India will set up its second plant near Bhiwadi, Rajasthan at an investment of Rs 470 crore. It is less than 50 km from its existing unit in Manesar, Haryana.

HMSI will kick off production here in the second half of calendar 2011 with an initial annual capacity of 6, 00, 000 units. Sources say this could be enhanced to over 1.5 million units should the need arise. The present Manesar plant is capable of producing 1.6 million bikes and scooters. To be housed within the Tapukara Industrial Area, the new HMSI facility will be practically next to the Honda Siel Cars India (HSCI) unit whose commissioning was put on hold following the global slowdown.

"To that extent, there will be a consolidated Honda presence in one area rolling out cars and bikes," sources said. It is still not clear when HSCI will begin production of cars in this new plant (the Greater Noida facility is meeting this requirement) though reports have been doing the rounds that this could happen in end-2011 when the new small car hits the roads. This will also help vendors plan their units nearby which, in turn, will benefit Honda's two-wheeler business too.

HMSI makes scooters and motorcycles at Manesar and the second plant will go a long way in easing out capacity constraints. Indications are that it will largely cater to motorcycles while Manesar will end up focusing on scooters. The idea, though, is to ensure flexibility between the two plants so that production schedules are kept at an optimal level. HMSI is the clear leader in the gearless scooter segment led by its Activa model and is now pulling out all stops to grow its motorcycle business too.