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Japanese auto giant Honda Motor haws announced that it will invest Rs3,000 crore in its various businesses in the country over the next 10 years. Much of this investment would go into expansion of capacity in both cars and motorcycles and launch of new models. Honda is present in both passenger car and motorcycle segments in India. The passenger car business is under Honda Siel, in which it currently holds more than 99 per cent stake. Delhi-based Siel is reportedly planning to hike its stake to 5 per cent at a cost of Rs76 crore. In the motorcycle business, Honda Motor is a co-promoter of the country''s largest two-wheeler manufacturer Hero Honda. It also has a fully owned subsidiary Honda Motorcycle and Scooter India which sells gearless scooters and one motorcycle model. Honda Motor would set up a new subsidiary, Honda Motor India, to deal in auto components. The group believes a focused company would help synergise component sourcing for various group companies. The CEO of Honda Motor, Takeo Fukui, said India is a more promising market than China in the long term. The country is more attractive for Honda as it is a democracy. Honda Siel would expand its capacity to 1 lakh units per annum by next year from around 50,000 units currently. The company''s capacity would rise further to 1.5 lakh units by 2010. Honda is seriously considering an entry into the small-car segment. The premium hatchback segment is the fastest growing in the country as the recent excise duty cut has made the cars more affordable. Honda is in negotiations with some state governments for setting up a second car assembly unit, dedicated for small cars. Honda Siel would launch the premium sedan model Civic in India today. Civic is one of the global best sellers of Honda and the latest model was crowned as the ''car of the year'' in the US. Honda is launching the US version of the Civic in India, rather than the European model which has a much more radical design. The model would compete against the Skoda Octavia, Mitsubishi Cedia and Toyota Corolla. The premium sedan segment would see more competition in the near future. Hyundai is expected to launch an upgraded version of the Elantra while Maruti may launch a premium sedan from the Suzuki stable. Volkswagen and Nissan would also look at this segment as and when they enter the domestic market with full force. Honda entered India in 1984, setting up a joint venture with a local company to manufacture motorcycles. Since then it has become India's largest motorcycle manufacturer, selling 3.6 million bikes last year.
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