The world’s biggest two-wheeler maker, Hero Honda Motors India (HHML) has made announcement about the commencement of its operations at its new plant in Haridwar, Uttrakhand.

The production capacity of the company’s new facility is envisaged to be expanded in phases, initially from 0.5 million units to a million units by the end of the existing year (2008).

The company has invested Rs 450 crore in the Haridwar plant up till now. It will also invest an additional Rs 150 crore in 2008 to raise plant capacity.  

Last year, Hero Honda declared that the overall investment by the company together with its ancillaries will be augmented to Rs 1,900 crore by the end of 2010.

Besides, the plant’s total capacity will be raised to 1.5 million units by 2010.
Over 100 ancillaries will establish their manufacturing base at Haridwar, about 40 of which have already moved into the industrial parks being developed for Hero Honda in the 275-acre plot.

HHML managing director Pawan Munjal stated, “We will produce 7,00,000 bikes at Haridwar this year. Our two models—Splendor and Passion—will be manufactured here and going forward, we will maximise volumes from this plant.”

The company has no plans to increase prices, accompanying the increase in input prices that pulled its contenders including Bajaj Auto and TVS Motors to raise prices.

“We are in no hurry to increase prices keeping in view the excise benefits we will avail in Haridwar. We are yet to take a call. Margins are under pressure and we are looking at all options,” Mr, Munjal added.