Honda Motor spent an estimated 1,000 crore to acquire 380 acres in Gujarat to set up a manufacturing unit, as the Japanese automaker bets on the long-term potential of the Indian market despite its factories now producing fewer cars than what they are designed for.
The new site is at Vithalapur, about 80 km north-west of Ahmedabad, where Honda last year opened a facility for two-wheelers. Honda Cars India bought land from individuals and completed transactions this month.
The land acquisition comes as a surprise, as the company’s current facilities – at Greater Noida and Tapukura, Rajasthan – utilise just 60-70% of their combined production capacity of 2,40,000 vehicles. But with challenges of land acquisition and rising realty prices, it wants to derisk itself from future volatilities, people in the know said.
Read more: ET Auto
