Slowdown wary Hero Honda puts off plant opening

July 7, 2007

What exactly is happening in the two-wheeler segment? There is hardly any new investment or new product launches. Apparently, the two-wheeler
sector is gearing up for a slow down.

The slow down is affecting even the biggest players in the sector. Two-wheeler major Hero Honda Motors Ltd has said that it has put off the start of its third factory at Haridwar in Uttarakhand till the next fiscal year. The start of production at the new factory has been postponed to the financial year starting April 2008.

The company had lined up plans to start production from its Haridwar plant in October 2007. But now, this is not going to happen. With sales expected
to remain largely flat, Hero Honda says that its current capacity is enough to cope with demand.

Meanwhile, a report quoting a Hero Honda official says that the new fiscal would see the industry picking up pace and this will be the ideal time for Hero Honda to start production at Uttarakhand. The Haridwar plant will be completed, as scheduled, in August 2007 and will have an initial capacity to make 5 lakh units a year. The production capacity will be increased later to 15 lakh units per annum.