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Hero Honda and Bajaj Auto plan expansion in Uttarakhand

Auto giants Hero Honda and Baja Auto which have both set up units in Uttarakhand are planning to go for major expansion programs despite the expiry of area based exemptions.

Hero Honda however said that the expansion plans are being kept under wraps apparently due to major rivalry between the two motorcycle manufacturing companies with their top officials refusing to say much on the issue.

Sensing that Hero Honda might set up its fourth unit at Haridwar, Bajaj Auto Managing Director Rajiv Bajaj would travel to Pantnagar in the fist week of May to chalk out a new strategy on the expansion program. The sources close to the development say the company is going for the capacity enhancement as part of its second phase expansion plan. Under the plan, the company is likely to increase the capacity of its plant to 100,000 from 70,000 units per month. There may be other plans in the offing, they claimed.

On the other hand, Hero Honda is also looking forward to utilize its nearly 100 acres of vacant land at its Haridwar manufacturing facility. Though the company is looking for land at various states like Karnataka and Himachal Pradesh, sources said the auto giant would consider Haridwar in case it failed to find suitable land elsewhere in country.

In addition to this, Hero Honda has also decided to scale up production at its Haridwar manufacturing facility. The company last year resolved most of the contentious issues with the State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd to retain its hold over the 94 acres of vacant land at Haridwar. For this purpose, the company has understood to have deposited INR 32.5 crore with Sidcul to retain hold over the vacant land.

Sources said both the companies were still bullish on Uttarakhand despite the fact that area-based exemptions which attracted them to set up units in the state had expired on March 31. Uttarakhand Congress leaders including Union Minister of State for Labour Harish Rawat are still hopeful that the industrial package would be extended for another three years.

(Sourced from BS)