Honda Gets OK To Set Up India Subsidiary

NEW DELHI: India has approved a proposal of Japan's Honda Motor Co. to set up a fully owned subsidiary here to manufacture scooters and other two-wheelers, United News of India reported. The approval was granted by the Foreign Investment Promotion Board. Honda is planning to invest 1.83 billion rupees (US$42.1 million) to set up the subsidiary. Meanwhile, a declining scooter market is being blamed for disappointing earnings at another Indian scooter maker. Rahul Bajaj, the chairman and managing director of Bajaj Auto Ltd. says the fiscal 1999-00 (Apr.-Mar.) would be a bad year for his company. "The market for scooters is down right now," says Bajaj, who predicted sales would pick up next year. Bajaj also said his company plans to introduce new models and an aggressive marketing campaign. He made the comments at the fringe of a news conference at Confederation of Indian Industry, a grouping of leading Indian businesses. Bajaj's quarterly (Apr.-Jun.) results showed poor performance with net profit declining to 1.11 billion rupees compared with 1.20 billion rupees in the same period a year earlier.