Honda plans setting up car manufacturing plant in Gujarat

Japanese auto giant Honda Cars India Ltd has approached the Gujarat government with a proposal to set up a car manufacturing plant near Vithalapur village in Ahmedabad district with an investment of over Rs 1,000 crore (Rs 10 billion), a senior government official said on Tuesday.

According to the official, who has requested anonymity, the proposal moved by the company is in final stage of consideration and may get approval of the state Cabinet soon.

Interestingly, Honda Motorcycle and Scooter India Private Ltd (HSMI) had three months back announced establishing the world's largest scooter plant at the same village, 110 kms away from here.

The setting up of the car manufacturing facility is under the "mega Project" category of the new Industrial Policy of the state government.

According to the official, the representatives of Honda recently met state chief secretary with the formal proposal for the purpose.

"The proposal is in the final stage and would get approval of the state cabinet under our Mega Industrial Policy within next few weeks time," he said.

"Honda will invest at least Rs 1,000 crore to set up car manufacturing plant near Vithalapur," he added. This will be Honda's second major investment in Gujarat, particularly in vicinity of Vithalapur village.

HMSI had signed a State Support Agreement with Gujarat government in September for setting up their two-wheeler manufacturing plant at Vithalapur village with an investment of Rs 1,100 crore (Rs 11 billion).

The capacity of the car plant is yet to decided, the official added. Car makers like Tata, Ford, Maruti have already invested in the state.