NEW DELHI: Honda Motorcycle and Scooter India (HMSI), the wholly-owned subsidiary of Japanese Honda Motor Company, is looking to set up its second plant outside Haryana after it was it by labour unrest and production delays in the state for over three months starting July.

HMSI is considering various options to increase production capacity beyond 15 lakh two-wheelers, which it is likely to exhaust by the next fiscal-end.

The company has undertaken a feasibility study to evaluate all options to set up a greenfield plant. It is also considering expanding its first plant in Manesar, Haryana.

The plan to move out from Haryana is part of the strategy to de-risk its business out of single manufacturing location. Rico Auto, the autoparts maker that faced a month-long labour problem, is also planning to move some of its businesses out of Haryana.

“We do not rule out the possibility of moving to the south or west, but ideally, we should stick to north India where we have a fully developed supplier base and logistic set-up. Industrial unrest is widespread in India and we can face similar problems anywhere in the country,’’ HMSI president & CEO Shinji Aoyama said.

Honda had faced persistent labour trouble at its two-wheeler plant in Manesar between July and October suffering financial losses of over Rs 300 crore due to massive drop in production.

Its workers had arbitrarily slowed the production lines demanding better wages and perks, resulting in only 30 per cent utilisation of the plant. The restricted supply piled up orders of 1.6 lakh customers, which it is trying to produce in three months. For this, it had to enhance capacity to 15 lakh in the middle of this year.

As per the operating officer of Honda Asia Oceania, M Takedagawa, Honda Siel set up a second plant for Honda cars at Tapukara in Rajasthan to take advantage of the supplier base at its first plant in Greater Noida. “For scooters and bikes too, we may look for a location that’s close to our Manesar plant,’’ he said.