Quake effect: Honda to temporarily cut India production

Japanese car maker Honda today said it will temporarily reduce production of vehicles at its Indian facility from May onwards due to supply constraints of parts following the devastating earthquake and tsunami there.

Honda Motor Co, which is present in India through a joint venture with the Siel Group, manufactures cars at a facility in Greater Noida in Uttar Pradesh that has an installed capacity to roll out 1 lakh units per year.

"Till April, we can continue our production. After that there will be temporary reduction of production," Honda Siel Cars India (HSCI) Vice President (Marketing) Jnaneswar Sen told PTI.

The company is currently studying the scenario that by how much the output will be cut due to supply issue, he added.

The HSCI facility at Greater Noida is at present rolling out about 5,000 units every month. The company imports various components from Japan such as engine parts and electronics.

The Indian division has also set up its second facility at Tapukara in Rajasthan. The plant, which has a capacity to produce 60,000 units annually, has not started manufacturing of vehicles yet.

In a statement, Honda Motor Co said: "Honda is striving to continue production at each automobile production plant. However, the possibility of a temporary reduction of production volume due to the short supply of some parts in the future is being carefully examined at each plant."

The company is working throughout Asia and Oceania to overcome these temporary parts flow issues and minimise the impact on its associates, dealers and customers, it added.

It said its most of the Japan-based suppliers are making progress to restart production or are ready to resume parts production.

"However, there are a few suppliers that have yet to resolve the challenge to resume their production. In those cases, Honda is working with its suppliers to help reestablish their operations, while evaluating other possible sources for those parts in the supply chain," it added.

Earlier, the company had postponed the preview of its small car Brio in India scheduled for March 17 due to the natural disaster.

On March 11, a disastrous earthquake hit Japan that was followed by a devastating tsunami sweeping away houses, overturned ships, vehicles and set ablaze several buildings, including a petrochemical plant. It left thousands of people dead or unaccounted for.

Compatriot Toyota had postponed the official inauguration of its second Indian manufacturing facility at Bangalore in view of the earthquake and tsunami. Suzuki had cancelled celebrations to mark one crore production milestone in India.