Power train unit in India

Honda Siel cars India (HSCI) is planning to set up a power train unit in the country. The company has already said it would set up a second manufacturing plant for making small cars and the power train unit would come up along with the new car plant, sources said.

Earlier other automobile giants like General Motors, Maruti Suzuki, Hyundai, Renault and Ford, had announced plans to set up engine and transmission making facilities in India for both domestic and export markets.

HSCI are still evaluating whether it makes sense for Honda to set up a power train unit as they already have one in the region (Thailand). For a power train unit to be commercially viable it should have a minimum capacity of about 300,000 units and HSCI have formalized plans for a capacity of making only 100,000 cars.

The company is currently in discussion with various state governments for setting up its small car plant with a capacity of one lakh units, taking Honda’s total capacity to two lakh cars per year. Sources said the company may announce its plans for the unit when it decides on the location for its small car project. They have short-listed four states and will make final decision before the end of this fiscal.

The four states that are in the race to bag the prestigious project are Uttar Pradesh where the company has its existing plant, Rajasthan, Maharasthra and Tamil Nadu.

There is no doubt that in addition to IT India is prefereed by Automobile manufacturers. This is also proved bu MUL joint Venture.

MUL in a joint venture is likely to build bike and car parts for Suzuki. India’s largest car maker Maruti Udyog is now lending its Japanese parent Suzuki Motor a helping hand in producing two-wheelers in India. Japan’s Bellsonica Corporation is forming a joint venture with MUL to manufacture sheet metal, chassis and other critical components used in building Suzuki motorcycles and cars in India.

Bellsonica sources said that they have sought FIPB nod to establish this JV in India and ride the current boom in automobile demand. With the automobile market growing at a rapid pace it seems the Bellsonica has decided to set up its Indian operations and ride the boom. The venture would commence operations in November 2007 which is earmarked to be set up with an initial paid-up capital of $ 3 million. The venture is confident of turning profitable from its third year of operations. It is planned that the venture will manufacture two and four wheeler sheet metal parts, chassis, structural and rigging components. This will be in addition to producing tooling and jigs. The firm has projected a net profit of $ 100,000 in 2009 on revenue of $ 12 million.

HSCI is looking for a plot between 500-700 acres to house the new manufacturing facilities. The new plant could see an investment of up to Rs 3,000 crore. The existing plant at Greater Noida is currently being expanded, which will double its capacity to 100,000 cars per annum by the end of 2007. There is no space to expand capacity at the existing unit which has an area of 150 acres.