Honda Motorcycle & Scooter India (HMSI) intends to set up its second plant in the country with an initial investment of up to Rs. 4 billion (US$ 86.2 million). Currently, the firm is in talks with a number of states but is yet to finalise a location.

"Our existing plant is expected to reach 100% capacity utilisation by 2010-11. But this can be stretched by the outsourcing of non-critical processes. We are doing an internal study on the second plant, which is likely to come up on 50 acres," HMSI Operating Head (Finance & Accounts) Sushil K. Kabra said.

As of now, HMSI's sole manufacturing facility is located at Manesar in Haryana. The two-wheeler maker has invested Rs. 13 billion (US$ 280.2 million) in the plant.

HMSI, which is a subsidiary of Japan's Honda Motor, anticipates a sale of 1.25 million vehicles this financial year and expects the figure to rise to 1.5 million next year. Last year, the bike-maker had sold about 1.07 million units.