Japanese automotive giant, Honda Motor has said that it will invest Rs. 2500 crore or $460 million for setting up a plant in India with an annual capacity of 1.2 lakh cars per year.

The company is looking to expand its presence in the Indian market after it parted ways with its former partner, Hero. Yoshiyuki Matsumoto, Honda managing officer has said that it will release the first car from the plant in Rajasthan next year. The plant now builds car parts and the new investment will now allow the company to start producing full vehicles.

The company has said that it will release diesel models in its entire range in the country. Honda has recorded an increase of 45 per cent in car sales during this financial year even as the automotive market has remained weak in the country. Honda said that its sales were higher due to high demand for its Jazz and Brio models in the country.

The Japanese firm and India's Hero concluded their partnership in 2012 paving the way for the company to launch its new models in the country.