Karnataka makes a pitch for Hero Honda plant

Karnataka makes a pitch for Hero Honda plant

10 Mar 2010, 0302 hrs IST, ET Bureau

BANGALORE: A team from the Karnataka government led by chief minister BS Yeddyurappa met the top officials of Hero Honda Motors to impress upon the two-wheeler maker to set up their manufacturing plant in the state.

At the meeting in New Delhi on Tuesday, Hero Honda Motors team was led by chairman Brijmohan Lall Munjal and MD Pawan Munjal. The firm has shortlisted Karnataka as one of the states for setting up its fourth manufacturing plant.

A team from Hero Honda has already visited Karnataka and looked at a site in Hubli, though a final decision is likely to be taken next month after they make their second visit.

During the meeting, the Hero Honda officials raised certain concerns regarding fiscal incentives that would be possible if they are looking at Karnataka as their destination for the manufacturing plant. The state government conveyed the message that they could be given refund on value added tax (VAT) and other concessions if the investments are above Rs 250 crore.

Hero Honda has proposed an investment of Rs 2,000 crore for the plant and the state government has shown them two sites — 500 acres in Hubli and 1,000 acres near Dharwad. The Karnataka government is keen on locating Hero Honda’s project in the Hubli-Dharwad area as it wants to turn this region into a automobile hub. Dharwad already houses Tata Marcopolo Motors, which manufactures buses, and Telcon Construction Equipment company.