The world's largest two-wheeler maker by volume, Hero MotoCorp, will invest 2,575 crore to set up two new manufacturing plants in Gujarat, Rajasthan and a new R&D centre by 2013-14.
The first would come up at Neemrana by first quarter of FY 2014 with 400 crore investment and will have an initial installed capacity of 7.5 lakh units per annum. Its proposed Gujarat plant will see an investment of 1,100 crore and have 1.2 million units capacity by the second quarter of 2013-14.
The company also announced plans to set up an integrated research and development (R&D) centre spread across 250-acre near Jaipur in Rajasthan entailing an investment of 400 crore.
Besides, Hero would also invest 500 crore in capacity expansion of its existing plants at Haridwar, Daruhera and Gurgaon.
The Japanese two-wheeler maker Honda Motorcycle and Scooter India (HMSI), has announced its plans to invest Rs 800 crore for setting up its fourth plant at Narsapur in Karnataka. Honda's third plant is also located at the same site and has a 1.8 million unit's production capacity. Company's first plant, has a capacity of 1.6 million units, is located in Manesar in Haryana and the second plant is located in Tapukara in Rajasthan, with a capacity of 1.2 million units and an additional second line assembly plant starting from March 2013.With this, the total capacity of the company will increase to 6 million units per annum by 2014.
Yamaha is expanding its capacity in existing two plants and also coming up with a 3rd plant in Chennai, shooting up its capacity from 5 lacs units per annum to 12 Lakh units per annum within a span of 18 months. At present they have 400 dealers, to increase the distribution network in tier 2 and tier 3 cities they are increasing to total of 2000 dealers.
Suzuki, in a bid to carve its place in the India two-wheeler category, has announced an expansion plan under which it will increase its annual production capacity from 3.6 lakh units to 5.4 lakh units and also strengthen its dealer and service network by 2013.
Royal Enfield existing capacity is 1.5 lac units per annum and is on a verge of doubling their production bike capacity in 2nd quarter of 2013.
The Italian Auto-Maker, Piaggio, has now become ready to increase its production capacity from the present 1.5 lakh units per annum to a whooping 3 lakh units per annum by 1st half on 2013.
MNCs have deeply penetrated the Indian two-wheeler industry and are spreading their reach all over India with extensive distribution network. By the end of 2014, Annul demand for two wheelers will be 11 lacs units and the production of Hero+MNC's (Honda, Suzuki, Yamaha, Royal Enfield and Piaggio) will be above 17 lacs units. Due to this, it will lead to an intense competition and price war directly affecting the local players like Bajaj Auto and TVS.
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