Honda Motorcycle & Scooter India (HMSI), a wholly-owned subsidiary of Honda Motor Company, Japan, has opened its third manufacturing facility in the country at Narsapura Industrial Area in the Kolar district of Karnataka, at an investment of Rs 1,350 crore.

This is the company’s first manufacturing facility in the south, and for Bangalore this is the second Japanese auto manufacturer to open shop, the first being Toyota in the late 1990s.

Seventeen vendor partners of HMSI have invested an additional Rs 1,700 crore in the Narsapura Industrial Area. The total job creation between the vendors and the manufacturing facility is expected to be 8,500. HMSI’s facility has the capacity to produce 12 lakh units per annum, which the company will ramp up to 18 lakh units by the end of this calendar year. Initially, the facility will manufacture two of the company’s popular brands — Dream Yuga and Activa. Production of the Dream Yuga will commence in June followed by the Activa.

Through this third facility HMSI increases its annual production capacity in India by 64% to 46 lakh units per annum. The company’s two other manufacturing units — at Manesar in Haryana and Tapukara in Rajasthan — have a combined production capacity of 28 lakh units.

In the fiscal year ended March, the company sold 27.55 lakh units, a 31% growth over the previous year. The overall industry reported growth of just 2.4%. Keita Muramatsu, president & CEO of HMSI, said that with the third facility, the company would touch a sales figure of 39.3 lakh units at the end of the ongoing fiscal, a 41% growth.

“The expanded production capacity will be supported by aggressive growth in the sales network to 2,500 outlets and rapid new product introductions as we aim for market leadership,” added Muramatsu. Earlier this year HMSI overtook Bajaj Auto to become the second largest two-wheeler manufacturer by volume in India. Hero MotoCorp is the largest.

“In the current fiscal year, Honda’s global two-wheeler sales growth is expected to increase more than the previous years and is headed to new heights because of its operations in India,” said Yoshiyuki Matsumoto, managing officer, Honda Motor Co. He added that India was one of the most important markets for Honda’s overall business.

Matsumoto said that out of the total 4,500 jobs at the new facility, nearly 90% were being offered to local youth.