Honda to set up New Plant in Gujarat, Investing Rs 4,000 Crore

After Tata Motors, Ford India and Maruti Suzuki, Japanese auto giant Honda is inching towards setting up its new plant in Gujarat. The Indian subsidiary of Japan-based car maker is all set to sign a state support agreement (SSA) with Gujarat government in next three to four weeks.

The company intends to build a car manufacturing plant at Vithalapur, around 80-km from Ahmedabad. "The state support agreement is likely to be signed in the next 3-4 weeks with Honda Cars India," said industries commissioner Mamta Varma.

Sources close to the development said that company is in the final stages of getting land and is in touch with Industry Extension Bureau (IndextB). Initially, Honda Cars will invest Rs 2,200 crore- Rs 2,500 crore and finally, the investment is likely to go up to Rs 4,000 crore.

The setting up of the car manufacturing facility is under the 'Mega Project' category of the new Industrial Policy of the state government. The capacity of the proposed plant is likely to be in the range of 1 lakh to 1.25 lakh units per annum.

This will be Honda's second major investment in Gujarat, particularly in vicinity of Vithalapur village. Last year in October, Honda Motorcycle and Scooter India (HMSI) had held foundation stone-laying ceremony for its scooter manufacturing facility in Vithalapur with an investment of Rs 1,100 crore.

Gujarat, especially Sanand and Hansalpur, is turning out to be favorite investment destination for automobile manufacturers. Earlier in March, Ford India had commissioned its Rs 6,000 crore car making facility with an annual capacity of 2.5 lakh cars.

In January, another Japanese auto giant Suzuki Group had announced plans to infuse around Rs 8,500 crore over the next few years to set up three plants at Hansalpur with a total annual capacity of 7,50,000 vehicles.