Japan’s Honda Motor Company yesterday said it plans to more than double production capacity in India, announcing fresh investments for the country on the back of increased demand for motorbikes.

Honda, which is in the process of untying itself from India’s Hero Group, plans to invest about 15 billion rupees ($331 million), two-thirds of which would help set up a new factory at Narsapuram, near the southern city of Bangalore.

The rest will go towards doubling production capacity at an existing plant in Tapukara, in the state of Rajasthan, to about 1.2 million units, media reports said on Thursday.

An unnamed Honda official was quoted as telling reporters in New Delhi that the Narsapuram plant will start operations in the first half of 2013, boosting the firm’s production of two-wheelers in India to four million units.

The company currently turns out 1.6 million units.

India is the world’s second-largest motorbike market after China, with total domestic sales of 10.1 million units, according to industry data.

Honda is ending a 26-year-old joint venture with Hero Honda Motors to go solo in India through local subsidiary Honda Motorcycle and Scooters India.