Honda India has announced that it has begun manufacturing engines in its newest factory in Vithalapur, Gujarat. Apart from the extensive list of models available in the Indian market, the new factory will also be in charge of manufacturing engines for the international market. The outsourcing of manufacturing to other countries has long been in practice, and is largely responsible for lowering the prices of bikes in the market.
Other big brands such as BMW and KTM have outsourced engine production to China, with Loncin and CFMOTO, respectively. Apart from being able to sell their bikes at extremely competitive price points, outsourcing production also opens up hundreds, if not thousands of jobs in developing markets. India, which is considered by many as the world’s biggest motorcycle market, has already begun exporting its bikes to the international scene, particularly with Royal Enfield.
For now, Honda India will be manufacturing small-displacement engines for use in neighboring markets. Its 250cc and above single-cylinder engines, similar to what we see in bikes like the Rebel 250, CB300R and CRF300L, will be manufactured in India, and subsequently exported to other Asia Pacific markets like Thailand, Japan and Australia, as well as certain markets in Europe and the U.S. As such, we can expect to see updates to Honda’s small-displacement models very soon, likely with little to no changes in pricing thanks to this recent development.
Honda India expects to manufacture close to 50,000 motorcycle engines in the first year of production. Subsequent refinements to the facility will be made to eventually scale up production capacity, of course, dependent on global demand, as well as Honda’s overall vision pertaining to its entry-level, small-displacement models. Meanwhile, the new facility also addresses the need for enhanced manufacturing processes given the implementation of India’s BS6 emission standards, as well as the ever-tightening Euro 5 restrictions.