According to recent reports, two of the most awaited compact car launches by Toyota and Honda might be further delayed. Both these cars were supposed to make it to showrooms by the next couple of months. As the two Japanese auto majors struggle to meet production capacity because of constraints on component supplies, it looks like the launch of their new compact models will be delayed further.
Honda Siel Cars India originally intended to launch their Brio hatchback by August end, while Toyota Kirloskar Motors intended to launch their Liva earliest by June. Both of these companies will give their reconsider their launch plans in the coming few weeks.
At present the companies are waiting to get a clear picture about the component parts supply situation from Japan, which is expected to get clearer by the following next months. An executive from HSCI said that they working really hard so that the Brio hatchback can see daylight by August to September.
They do not know what the circumstances regarding component supplied will be after May. Because of this, it is difficult for them to affirm whether the Brio hatchback will be launched according to schedule. HSCI’s new Senior VP, Jnaneswar Sen, said that most of their components are imported from Thailand, while their import from Japan is limited to an extent.
They hope that the current supply crunch will be resolved in the next three months. They are currently planning that they will be able to launch the Brio by the coming festive season. With many months to go before the Brio hatchback is launched, they expect the launch to go according to schedule.
As we reported earlier, Honda was forced to decrease their production output at their Greater Noida plant, following shortage of fresh component part supplies from Japan. This is where they produce the Honda Jazz, City, Accord and Civic models. The new Brio hatchback will also be produced at this plant, with its trial production already having begun.
With the new Brio hatchback priced at under Rs. 5 lakh, Honda is planning on outfitting this car with more India components, so that it has to depend less on importing them from Japan. The executive from HSCI said that this will be the most significant launch for them, and they do not want to make a less than enthusiastic attempt at launching it.
They will also need to be adequately prepared for the request which the Brio hatchback could face as they do not want to make their customers wait endlessly for delivery. Of Honda’s installed capacity to produce 100,000 units annually, they were utlising 60% to produce 60,000 units annually. This production rate will further decrease after they bring about their 50% cut in production output.
Likewise, Toyota, based in Bangalore stated that they would be reviewing their launch plan for Liva by next month. This is a hatchback variant of the Etios sedan, which was launched by them earlier in the year.
Toyota Kirloskar’s Deputy MD for marketing, Sandeep Singh, said that, right now the launch for their Liva model is right on schedule. They would decide further, after they have taken stock of the situation by May end. TKM has already delayed launching Liva, once before for producing their Etios model, which is currently receiving high demand in the local market.
Liva was earlier supposed to be launched by February to March, however they are now looking towards a June launch. They do not want to repeat their Etios experience with the Liva. Many customers had reportedly cancelled their bookings when they were told to wait six more months for delivery.
TKM is now moving from five days a week to three days a week at their Bangalore plant. They are currently being forced to work at just 30% of the plants 150,000 units installed capacity annually. This roughly implies a 50% decrease in dynamic production of 85,000 units to 90,000 units annually.
Market experts have stated that the Liva hatchback is projected to bring in huge numbers for Toyota Kirloskar, as this car, like Etios is estimated to have a competitive price. Both the Liva and Brio will have to compete with other established brands in this market. These include the Wagon R, Maruti Swift, Ritz, Tata Indica, Hyundai i20 and i10, Volkswagen Polo and Chevrolet Beat.