Honda new 1.5 litre diesel engine unveiled, to be fitted first in Amaze

The company has announced to invest Rs 2,500 crore in India by 2014.

Last Updated: Apr 02, 2013, 16:14 PM IST

New Delhi: Japanese auto giant Honda on Tuesday unveiled a new 1.5 litre diesel engine, which will be fitted first in the upcoming sedan Amaze. The company claims that the diesel option of the car will give a mileage of 25.8 kilometre per litre.

"We are looking for increasing the localisation of the diesel engine. Our target is to have 90 percent local component in the 1.5 litre diesel engine by next year," Matsumoto, who is also the President and CEO of Honda Motor India, said.

The company will launch diesel options in all its future volume models in India and HCIL may look at different variants of the 1.5 litre diesel engine, he added.

"We will launch five important models, including full model changes,in India in the next 2-3 years," Matsumoto said.

When asked specifically if the company will introduce a compact sports utility vehicle in India, he said: "This can be a possibility."

Matsumoto said Honda is targeting to sell 60 lakh units per year globally by March 2017, out of which 30 lakh units will be contributed by emerging markets. The company currently sells around 35 lakh units annually.

The company said it will invest Rs 2,500 crore in India by 2014 to enhance its manufacturing activities and will launch five vehicles in the next two-three years to strengthen its position here.

As part of its plans, the wholly-owned subsidiary of the company, Honda Cars India Ltd (HCIL), will set up a car assembly line, a diesel engine component unit and a forging plant at its Tapukara facility in Rajasthan.

To align with its growth strategy in India, Honda has mandated its Managing Officer Yoshiyuki Matsumoto the additional responsibility of 'Representative of Development, Purchasing and Production in Asia and Oceania Region'. He will be based in India and will also be the President and CEO of Honda Motor India.

"India is a strategic market for us and it is a strategic base for our local procuring business... We will invest Rs 2,500 crore to expand production capacity of the Rajasthan facility," Matsumoto told reporters here.

The 437-acre Tapukara plant will have an installed capacity to roll out 1.2 lakh cars every year. It will also roll out 1.6 lakh diesel engines per annum from next year. The facility will become Honda's first fully integrated diesel engine plant in the world.

With setting up of the new car assembly line at Tapukara, HCIL's total installed capacity will go up to 2.4 lakh units annually, considering the Greater Noida plant.

The new assembly line and the forging plant will generate an employment of 2,200 people by 2014, in addition of 265 people already hired for the diesel engine component unit.

Elaborating the company's ambitions in India, HCIL President and CEO Hironori Kanayama said: "We are operating only in 10 percent of the Indian car market. We are now prepared to expand in the diesel segment and increase our presence in 50 percent of the market here in the next few years."

The company also said it will start exporting diesel engine components to the UK from the Tapukara plant in future.

Honda Siel Cars India (HSCI), Honda's erstwhile joint venture with the Siel Group, had earlier committed an investment of Rs 1,000 crore to set up the facility at Tapukara with an installed capacity of 60,000 cars per annum.

In September 2008, HSCI had partially opened the plant to start stamping operations and produce few parts for domestic and export markets. Later in December the same year, it postponed capacity enhancement and assembly operations at the plant due to a slowdown in the automobile industry.

In 2010, HSCI had announced a further investment of Rs 250 crore on the Tapukara facility to expand the power train unit, primarily to cater to its small car 'Brio'. It currently rolls out engine and transmission components such as cylinder heads and cylinder blocks.

In 2012-13, HCIL clocked an export revenue of Rs 242 crore from the Tapukara plant.