Honda Motorcycles and Scooters India Ltd has started the groundwork for manufacturing motorcycles, which will be launched in the second half of next year.

Company sources said the feasibility study has been completed and Honda has already identified the products which will be manufactured at its Manesar (Gurgaon) plant.

Currently, the assembly shop as well as vendors are being geared up for the project. “There will no clash of models with Hero Honda. We will consciously keep our range different from theirs,” the executive said, without going into details.

Hero Honda is a joint venture between Honda and the Munjal family, which manufactures only motorcycles. The two companies have a no-compete agreement which expires in June next year.

Brij Mohan Lall Munjal, chairman of Hero Honda said he was aware Honda had started work on the project, but admitted he had no plans to manufacture scooters yet. “Be rest assured Hero Honda will launch scooters. But I do not have a concrete plan now,” he said.

Hero Honda is also the country’s largest two-wheeler manufacturer, while over the past few months Honda Motorcycles and Scooters India has emerged as the largest selling scooter maker beating rival Bajaj by a small number.

Both the companies will have to procure technology — for scooters as well as motorcycles — from a Honda group firm. After HMSI set up shop in India, there were apprehensions that Honda may tighten its screws on Hero Honda in terms of technology, putting a big question mark on Hero Honda’s future. But the two companies sorted out the problem by deciding to keep their product range different.

A few months ago, Honda also extended its technology agreement with Hero Honda for a few more models, and for a few more years. Munjal said that this year had been a little difficult thus far because of truckers’ strike, general sentiment, etc. But next month, the 2-wheeler industry will look up, thanks to the good monsoons.

He said that overall margins in the two-wheeler business will remain strained because of increasing input costs and growing competition. But the company will still manage to post a significant growth during the year.