Honda Production Cut to Last another 3 Months in India

Honda Siel Cars India recently announced that their decision of decreasing car production by 50% in India will likely continue till the coming three months. The Japanese auto giant is currently facing limitations in parts supply following the destructive earthquake and tsunami in Japan.

Honda Motor has a JV with Siel Group and jointly operates as Honda Siel Cars in India. Their vehicles are manufactured at their Greater Noida facility in UP, which has a production capacity of 1 lakh units per year.

The HSCI Senior VP of Sales and Marketing, Jnaneswar Sen, said that at present the supply condition is not very good and they were therefore forced to announce a 50% cut in production beginning from May, though they started this exercise by mid-April itself. They also expect this state of affairs to extend into the coming three months.

Whether normal production will resume after three months depends on the resurgence of suppliers who were affected by this natural calamity and there is no definite information on this. Because of the new trimmed down production, the company changed to single shift operations in May.

Before the production cut at the HSCI’s Greater Noida facility came into affect, the facility produced around 5,000 units in a month. The HSCI Company currently imports many of their components from Japan, which include electronics and engine parts. They have also started their second facility in Rajasthan at Tapukara.

The facility has a production capacity of 60,000 units per annum; however they had not yet begun manufacturing any vehicles yet. The HSCI had earlier delayed the preview of their Brio car in India, which was planned for March 17, because of the natural disaster in Japan.

The Honda Motor Company also announced production cuts at their plants in Japan, because of component shortages caused as their parts suppliers were affected by the tsunami. They had reported earlier on that most of the suppliers based in Japan were making progress in restarting their production, with many already having done so or getting ready to resume parts production.

They are still a few suppliers, however, who are yet to get over the difficulties of resuming production operations. The auto company is currently working throughout the Oceania and Asia region to overcome the temporary issue of parts supply and for minimizing impact on their customers, dealers and associates. The March 11, earthquake which hit Japan, was followed by devastating tsunami which cause a lot of loss of life and property.

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