Honda Motor Co. has set a bullish sight on the Indian automobile market, announcing that it is stepping up automobile production in the country and will launch new models later this year, besides expanding its dealership network.

According to Masahiro Takedagawa, president and CEO of Honda Motor's Indian unit, Honda Siel Cars India Ltd, the automaker will start making its first small car in India from next year but is not interested in joining the race to build the world's cheapest car and its new offerings are not in line with Tata's $2500 car Nano or any other similar model.

We don't like 660cc engine cars. They are too small, we don't consider them cars, Takedagawa said, on the sidelines of inaugurating a new manufacturing plant in Greater Noida near New Delhi.

The new plant in Greater Noida will allow Honda to double its vehicle production capacity to 100,000 units annually.

Honda has spent Rs.1620 billion ($405 million) on the Greater Noida plant so far, Takedagawa said.

The top Honda executive said the company is spending Rs.2000 crore ($500 million) on setting up another one in Rajasthan and is expected to ultimately invest Rs.3000 crore ($750 million) in the plant which, once complete, will give it an eventual capacity of up to 240,000 units.

The Rajasthan plant will be operational in the last quarter of 2009.

The new plant in Rajasthan as well as the expanded facility in Greater Noida will help the company overcome the production shortage it faced this fiscal, Takedagawa said.

Honda also said it will launch its eight-generation Accord as well as Honda Civic Hybrid in India later this year. The petrol version of the company's small car Jazz will be launched in 2009. The company is also working on another new global small car to suit the Indian conditions, but it would take several years, before the car is launched in India, Takedagawa said.

Honda will also double its dealership network to 160 across 90 cities in India within the next three years, Takedagawa said.

Takedagawa also emphasized the company's commitment to protecting the environment. As we expand our presence in India, we are conscious of our commitment to the environment. Apart from setting up the mandatory infrastructure for water recycling and waste management, we have also set ourselves very stiff CO2 emission and waste reduction targets for our plant. Innovative use of solar power and recycled water will ensure conservation of scarce natural resources such as water and power, he said.

India is the most exciting auto market in Asia and has great potential for growth. We are committed to growth in this market, said Tatsuhiro Oyama, president and CEO, Asian Honda Motor Co.

Honda is the fourth largest automaker in India, behind Maruti Suzuki, Hyundai Motor Co. and Tata Motors.

India's economic boom has helped the nation's passenger car market double in the past five years and, government estimates claim that it may further triple to 3 million vehicles a year by 2015.