Even as the two-wheeler industry is facing a major slowdown in sales, Hero Honda opened a new plant at Haridwar in Uttaranchal with an initial investment of Rs. 450 crore.

The plant is third in the country with a manufacturing capacity between 5 and 7 lakh 2-wheelers which can be scaled up to 10 lakh units by the year end.

Aware that it might be difficult to sell more bikes in a sluggish market, the company has initiated Project Samadhan internally to identify new areas of growth for their three plants.

The four key elements of the new strategy includes a major push into rural India, expanding distribution reach even to mandis, tie-ups with more cooperative and rural banks, aggressively wooing college students and creating a new and growing market segment.

As reported by Business Standard, according to Managing Director Pawan Munjal, the two-wheeler industry has a long way to go in India, he sees demand for motorcycles increasing in coming years. China manufactures 20 million units per annum compared to 8-8.5 million units in India. He also sees the slowdown in demand only as a temporary phase.

The third assembly plant in Haridwar will be used to manufacture Hero Honda's Splendor Plus and Passion range of motorcycles and other high volume, high margin offerings.