Honda to continue production cut in India

New Delhi, Feb 22 (PTI) Japanese car major Honda will
continue to cut its India output by over 45 per cent for the
next six months in order to prevent inventory build up amidst
the ongoing slowdown in the domestic market.

The company, however, said its planned launch of
hatchback Jazz in the Indian market is on schedule. It is also
mulling to increase the prices of its products.

"We have already adjusted our productions. Today our
inventory level for India is quite appropriate -- two weeks
for our own hand and two weeks on dealers' side," Honda Siel
Cars India President and CEO Masahiro Takedagawa said.

The company, which is present in India through a joint
venture with the Siel Group, has cut its production to 200
cars a day in a single shift since the beginning of this year
from the capacity of producing 380 units a day in two shifts,
he added.

Asked how long the company plans to continue the
production cut, Takedagawa said: "After the market recovers
and once we decide to increase production, it takes about two
months to go back to full production again. Probably for the
next six months, single shift operations will continue."

Due to rising input costs and devaluation of rupee in the
international market, the company is planning to increase the
prices of its products.

"Devaluation of rupee is impacting our business, because
20-25 per cent of our components are imported from Japan and
Thailand. We need to adjust this cost impact," Takedagawa
said.

He, however, declined to comment on the quantum of
increase and when would the company do so.

"For CR-V, it will be substantial. For other models, we
will have to calculate from the component input percentage of
different models," he added.

On its forthcoming launch of hatchback Jazz, Takedagawa
said it was on schedule and the company has started trial
production of the car for introducing it in the Indian market
during June-July this year.

Declining to give details on pricing of the car, he said:
"Jazz will have a 1.2 litre engine, specifically meant for
Indian regulation to avail 12.5 per cent tax rebate."

The company currently has its manufacturing facility at
Greater Noida, with a capacity of one lakh units a year. The
company is also constructing its second facility at Tapukara
in Rajasthan, which would have a installed capacity of 60,000
units a year. PTI TR
RKM
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