Honda Plans to Cut its Indian Production by 50% from May

Japanese auto giant, Honda recently announced that it would be cutting its Indian production rate by 50 % from May onwards because of delayed component supplies after Japan’s natural crisis last month.

Honda which has its presence in India as Honda Siel Cars India through its joint venture with Siel Group, manufacturers automobiles at its plant located in Greater Noida. This plant has a production capacity of 1,00,000 units every year. Last year alone, Honda sold 60,000 models in India.

Newly appointed Jnaneswar Sen, Senior VP for Marketing and Sales at HSCI, said that they are experiencing breaks in their supply chain because of the circumstances in Japan right now. This has resulted in production being delayed. From May onwards, they will be moving towards single shift processes, while keeping an eye on the affairs in Japan.

This announcement came after Honda announced production cuts at their Japanese plants because of component shortages as a result of the earthquake and subsequent tsunami affecting the supply of parts from Japan.

The company statement also said that the parts supply problem in Japan is consistent, with the production of vehicles and component parts at their plants being approx. 50% of what the original production rate used to be. It also added that Honda would be managing operations and carefully monitoring the crisis.

Most of Honda’s Japan-based suppliers are in the process of development for restarting production, with many already resuming the production of parts. Few suppliers, however, are yet to overcome this challenge in beginning production. The company reported that Honda was currently working with their suppliers so as to help them reestablish operations, while also evaluating other sources which could supply the parts.

Sen added, that Honda is currently planning on bringing production back to normal as soon as the supply of component parts resumes. Some time ago, Toyota’s Indian division had also announced that they would be cutting down production capacity by 70 % at their Bidadi plant based in Karnataka.

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