TOKYO?Japan's Honda Motor Co. said Tuesday it would build a second motorcycle factory in India, employing about 2,000 people, to meet surging demand in the fast-growing market there.

The factory near Delhi is due to start operating in the second half of 2011 with a production capacity of 600,000 vehicles a year, according to Honda, which will invest about 100 million dollars in the facility.

Output could be doubled in the future if necessary to meet demand, a company spokesman said.

Together with its existing plant, Honda's motorcycle production capacity in India will increase to 2.2 million vehicles a year.

Japanese automakers and their rivals are competing for a slice of the fast-growing market in India, where a burgeoning middle class is boosting its spending on cars, motorcycles and other goods.

India is the world's second-largest motorcycle market after China. Sales at Honda's subsidiary there in 2009 grew 11 percent from the previous year to 1.09 million units, setting a record for a ninth straight year, the company said.