Thursday, December 15, 2011
By Pranjal Gera
Honda to source more local raw material from India
First the Tsunami and then the recent flood in Thailand has left nasty upshot on Japanese car manufacturers including Toyota and Honda due to having their production facility around. Honda Motors has undergone the ruthless damage and lost its major means of spares and electronic component production, which used to be supplied across the globe.
This has led the production & supply of components on hold since 4th October. It has adversely affected the scheduled launches of the Honda cars and market value of the company. Therefore, as an alternative, the company has decided to increase the localization from India by sourcing the raw material in order to regain the lost track.
This localization plan will not only enable the company to meet the constantly increasing market demands & scheduled launches of the upcoming cars- Honda City, Honda Brio and Honda Jazz but also to have a positive effect on its pricing strategy.
The Noida based manufacturing unit of Honda is now under consideration, which has a total capacity of producing one lakh units. The company’s officials stated that, it will start ramping up the production of the City in January and then the Brio & Jazz in February.
However, the company could just achieve 20% of their level (10,000 units/month) in the month of November, while December might be even inferior. The Honda Brio has suffered badly due to the severe shortage of the spare parts and components and launched a bit later to the scheduled time but has got massive response from the customers.
Recently, the much awaited face-lifted Honda City Sedan has been launched in the Indian market, which has got significant make-over and changes under the hood including new headlamps, grille, front bumper, additional interior features and more. So from January, Honda Siel is likely to gain momentum with its new production strategy.