Honda Motorcycle and Scooter India Pvt Ltd (HMSI) sold its very first two-wheeler in India in June, 2001, in the city of Bangalore, Karnataka. The two-wheeler sold was the Activa automatic scooter, which has now the mainstay for HMSI, currently holding the position of the top-selling two-wheeler in India. The company began its journey in India with its first factory in Gurgaon, with a single production line, which has now grown to four manufacturing facilities with 11 production lines across four states. The company currently has a total of over 31 mn customers across the country, and is seeing growing demand for its products, especially its flagship model, the Activa.
In line with this increasing demand for its products, especially scooters, HMSI recently expanded its third facility at Narsapura, near Bangalore, by opening a fourth production line. This additional line has expanded the plant’s annual production capacity by 600,000 units, to its new total capacity of 2.4 mn units, making the Narsapura plant the world’s largest two-wheeler production facility for Honda globally. This expansion has also made India the top production base for Honda worldwide, with HMSI’s cumulative annual production capacity from all four plants now standing at 6.4 mn units.
The Narsapura facility is HMSI’s third plant, which began production in May, 2013, with a capacity of 1.8 mn units per year. The company has directly invested about Rs 2,600 crore in the facility, and provides employment to 7,000 associates. HMSI’s 26 suppliers, who have ancillary units set up locally, have made additional investments of about Rs 2,800 crore and created 15,000 additional employment opportunities, in order to support the Narsapura plant.
This manufacturing facility has been developed with a ‘Green Factory’ concept, and is HMSI’s only plant with 100 % rain water harvesting system, as well as zero liquid discharge. This translates to almost 400,000 litres of water being recycled and re-used daily. Additionally, the plant is committed to achieving 80 % of its energy requirements from solar power, and reducing carbon footprint by 50,000 tonnes of CO2 emissions annually, by October, 2017. This will require the Honda Narsapura plant to generate 85,000 kWh solar power per day.
The expansion project of the plant, to add the fourth production line, began in February, 2016. This line will produce only scooters, but is flexible enough to produce both the Activa and Dio models on the same line. This new production line was set up with an investment of Rs 606.5 crore, featuring a built-up area of 69,500 sq m, with employment to 1,555 associates.
The company said this line has been designed with a simple layout to offer the best output in terms of efficiency and ergonomics during production. HMSI has also taken initiatives to improve manpower efficiency, which include automation in machining, material transfer through conveyors, automatic jig cleaning systems, single shot dye in press shop and other lean manufacturing practices. All these initiatives have resulted in claimed production efficiency of 0.6 persons per vehicle manufactured.
The new line features a number of technology initiatives, of which some are first for the company in India and others for Honda globally. The new paint booth features a fully-automated air balancing system, which is the first for any Honda plant globally. This system automatically adjusts the amount of air necessary for the paint flow, ensuring consistent quality of air, which eventually translates to a consistent paint finish. The line also features 14 robots for various processes, along with overall increased automation in the machine shop, paint shop and weld shop. Other highlights of the line that address better production and efficiency include high-speed honing machines for better engine quality, and waste heat recovery from the paint oven exhausts.
In terms of Honda’s total global sales, covering two-wheelers, passenger vehicles and power products, the Asia Oceania region is driving growth by contributing to 60 % of total business. The Asia Oceania region includes the whole of Asia, with the exclusion of China and Japan. Within these three divisions, two-wheelers contribute to almost 90 % of the business within this region. To put things into perspective, India contributes to over 30 % of Honda’s global two-wheeler business, having overtaken the Indonesian market in 2016. This single-handedly makes India the largest market for Honda’s two-wheelers business worldwide.
HMSI currently has the highest market share of 59 % in the automatic scooter segment, and takes second spot in the motorcycle segment. HMSI is said to have set its most challenging target yet, with the company aiming to sell 6 mn units of its two-wheelers in FY 2017-18. It claims to have brought in a number of disruptions to the Indian market over the years, with BS IV and automatic headlamp this year, followed by ABS and combi-brake system (CBS). HMSI will continue its disruption with products aimed at the big jump to upcoming BS VI emission standards in 2020. The company said BS VI norms are challenging, yet exciting, and that it is completely ready for the upcoming norms.
HMSI is not only looking at addressing Indian demands, but is also focussing on global market by ensuring a high level of quality, and making India an export hub in the near future. A number of goals could be supported by new capacity creation at the Narsapura plant, since it is claimed to be a benchmark facility for Honda globally, having the status of being the plant with the highest-productivity for Honda ever.
TEXT: Naveen Arul
PHOTO: HMSI & Naveen Arul