The facility, Honda Genbetsu India (HGID), would focus on research and development and is likely to come up at the company's existing manufacturing plant at Greater Noida, sources with knowledge of the matter said.
It already has local R&D operations, which would likely be separated into the new unit, they said. The unit will likely come at an initial investment of around Rs 500 crore. According to sources in the automotive industry, this facility will extend support for Honda's localisation strategy for its running models as well as provide designing support for some upcoming India-specific models in the near-term.
After developing a phenomenally fuelefficient diesel engine and lining up some interesting products like the Mobilio multipurpose vehicle and the Jazz premium hatchback for India, Honda is enthusiastic about its prospects in the Indian auto market. "After the success of its India-specific Amaze sedan, Honda is revitalising its plans for this market.
It plans to develop smaller cars focusing on the Indian market where HGID would play a critical role," said a source. Honda sales have zoomed after the launch of its diesel cars, especially the Amaze.
It became the fourth largest carmaker in India in January, overtaking Tata Motors and Toyota Kirloskar Motors. It sold 15,714 cars in January, nearly three times compared with a year earlier.
Honda Cars India already operates another local entity, Honda Motor India, which takes care of its components and motor parts business. The new R&D unit would be the third business closely associated with its car manufacturing operations.
Responding to a query from ET, Honda Car India said it is committed to the Indian market and will expand the focus of its R&D operations towards more India-oriented products in coming years.
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