Honda Car India Limited has been present in India for a long time now. Amidst the slowdown in the market, Honda is currently looking at ways to restructure its operations in India. The Japanese automobile manufacturer has seen its sales falling to almost half in the last four years and the manufacturer is now planning to close down the manufacturing unit.
The sales of the Honda Car India is expected to fall below 1 lakh units in the current financial year. To recover the money lost in the market and to realign the brand’s strategy with the falling sales, the brand will reportedly sell its Greater Noida manufacturing facility. Honda Car India currently operates two manufacturing facilities in India, there is one in Noida while the other one is in Tapukara, Rajasthan. The report in ET Auto suggests that the manufacturer will move the production from Greater Noida to Tapukara in the coming months. Also, for expansion purposes, Honda had bought land in Gujarat a few years back but the same report says that the manufacturer will also sell off the land in the state.
Honda’s Greater Noida facility is the first manufacturing plant of the brand in India. A part of the facility may get converted into a Research and Development hub. Also, a small assembly line for the Completely Knocked Down (CKD) products may get started in the facility.
Currently, the Greater Noida plant of the manufacturer can handle the production for 1.2 lakh units per annum. However, due to the slowdown, the production has been reduced to only 2,500 units per month, which translates to about 30,000 units per annum. It is only about 20% of the original production capacity of the manufacturer. The report further says that a senior management team led by Masayuki Igarashi, who is the head of the Asia-Oceania region of HCIL visited the Indian plant with a team from Thailand. The new strategy,w which is currently under the review will see the restructuring of the manufacturing plants and align the production facilities to the demand of the market. Honda has also slowed the process of dealership expansion in India and investment that would have been used for a new customer interface. Honda has already moved the production of the current-generation City to the Tapukara plant.
Honda is planning to launch new cars like the all-new City in the Indian market in the coming months. The manufacturer launched the all-new Civic earlier this year and the car has received a good response from the market. However, since it is a low-volume segment, the sales numbers are not as good as the manufacturer would have liked. Honda will also not participate in the 2020 Auto Expo, which is the biggest automobile exhibition in India.