The company will be setting up dedicated manufacturing facilities for supply under this arrangement for HMSI with an estimated project cost of Rs 80 crore, majority of which will be funded through internal accruals. The plant is expected to be operational by Q1 of FY2013-14.
As per the market reports, HMSI, leader in the scooter segment in India, enjoys 45% market share in the segment with its Activa, Dio and Aviator Scooters, therefore the company expects that this opportunity will generate good business and profitability for the company in future, since HMSI is adding 1.2 mn unit capacity in Bangalore. Thus India will become the biggest market for Honda's two wheeler business by 2015 and would account for 30% market shareof its overall global market.
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