Japan's Honda Motor Company is all set to start its new production plant in India. The new plant will be located in the state of Rajasthan. The total investment for this second plant is estimated at Rs10 billion ($215 million). The initial annual production capacity for this new plant would be 60,000 units.

Auto demand in India is at peak. Honda India is also getting very good response for its products. In the first ten months of 2009/10 Honda Siel sold 49,609 units, a rise of about a fourth from year ago.

Company's first plant near New Delhi has the capacity utilization of 100,000 units. Honda will start the production at its new second plant once its first plant reaches its full capacity utilization. The decision by the company is a good move to strengthen its market position in India.

Honda's new plant in the northwestern Indian state of Rajasthan had been deferred by the company mainly due to depression in the auto demand.