NEW DELHI (AP) - Japanese auto giant Honda Motor Co. plans to double its production capacity in India by next year, set up a fully owned subsidiary and invest about $650 million over the next 10 years to expand its business here, the company's chief executive said.
President and CEO Takeo Fukui said Honda sees India as a more important market than China and that the growth potential here is the highest.
Expanding business in India is ''one of Honda's three key global strategies, together with strengthening the foundation of our business in the U.S and Japan and enhancing Honda's leadership commitment to protect the environment,'' Fukui told reporters after a series of meetings with Indian partners.
But the company does not plan any major investment right away. The 30 billion rupees will be invested over the next 10 years, he said.
Honda prefers to scale up its operation in India ''step by step'' as it did in other places including the United States, Fukui said. ''In Honda, we say: 'start small and grow big'.''
Its auto plant in Greater Noida, which neighbors New Delhi, currently has a capacity to make 50,000 cars.
''By the end of next year, we will double this annual capacity to 100,000,'' Fukui said.
Meanwhile, the company has decided to establish a new, fully owned subsidiary to consolidate its business, Fukui said, in what appeared to be the first move toward building independent business operations here.
Honda entered India in 1984, setting up a joint venture with a local company to manufacture motorcycles. That company _ Hero Honda Motors Ltd. _ has since become India's largest motorcycle manufacturer, selling 3.6 million bikes last year, according to company figures.
Honda also makes power generators and cars in partnership with other Indian firms.