Honda's answer to Swift, Getz

Japanese car major, Honda Motor Company, will launch a small car through its 100 per cent subsidiary company, Honda Seil Cars India, by 2010.

The company is on the lookout for the possible locations for setting up the greenfield plant.

HSCI is in talks with various state governments which includes, Rajasthan, Maharashtra, UP and Tamil Nadu for the proposed new plant.

"The factors which would determine the finalisation of the land would be done considering the logistics, man power and cost of land", said Jnaneshwar Sen, senior general manager-marketing, HSCI. The process is expected to fructify by March 2007.

The company refused to let out the details of the investment plans earmarked for this project.

The company is said to have been mulling for a car that would adhere to the definition of a small car as specified by the Union budget and fall under the excise duty slab of 16 per cent.

The car would boast a petrol engine that would not be longer than 4 meters in length or with an engine capacity not exceeding 1.2 litre. The car will fall under the premium small car category and would be priced accordingly.

Further, the company has said that it would produce 50,000 units of the vehicle per annum by 2010. The company has ruled out the possibility of launching the Jazz (its other small car) in the small car category.

The car will be pegged against the likes of the Maruti Swift, Hyundai Getz, Fiat Palio, General Motors UV-A and the yet to be launched Volkswagen Polo.

"With the launch of this new, car we do not intend to be a volume player in the domestic market," Sen added. Along with this, HSCI will also hike the production capacities of its existing plant in Greater Noida in Uttar Pradesh to 100,000 units from the current of 60,000 units.

With reference to the Indian automobile operations, Takeo Fukui, president and CEO, Honda Motor.

Company, said "Annual automobile production capacity in India will be doubled to 100,000 units by the end of 2007."

HMC has also said that it would augment production capacities of its two wheeler arm, Honda Motor Scooters India (HMSI) in 2007.

Keeping India as its focus, the company has set target for Asia Region (excluding Japan & China operations) to 320,000 units for this fiscal and and 360,000 units by next financial year.

The company has also decided to hike the prices of all to its products (except the newly launched CR-V) from January next year.

The prices will be raised in the range of 1.5 per cent to two per cent. The reason provided for the hike is due to increased input prices and costlier logistics expenses.