New Delhi: The Indian unit of Honda Motor Co. Ltd plans to export crankshafts to its parent’s factories in Japan from October, the company said.
A crankshaft converts the up-and-down motion of pistons into rotation. It is difficult to manufacture and requires precision engineering.
Honda Siel Cars India Ltd said it had received the order due to an increase in sales of small cars in Japan, which have risen mainly because of incentives announced by the Japanese government.
Increased sales: A Honda Siel assembly plant in Surajpur, Uttar Pradesh. Ramesh Pathania / Mint
This has resulted in a capacity constraint at Honda’s facilities in Japan, according to Masahiro Takedagawa, president and chief executive of Honda Siel.
The crankshafts that would be exported are for cars made with the same engines as the Jazz and City models.
The crankshafts produced at the company’s Tapukara, Rajasthan, plant will be exported at an average rate of 10,000 units a month, Takedagawa said. Honda Siel plans to export 54,000 units in the year to 31 March. It declined to specify how much the order is worth.
The company inaugurated its second facility at Tapukara in September last year as part of an aggressive expansion drive. But slowing car sales meant that the company could not fully utilize the installed capacity at its factory in Greater Noida on the outskirts of New Delhi.
In December, Honda announced that it planned to use the Tapukara plant only as a base to supply components to its Greater Noida facility.
Honda Siel has delayed the start of vehicle manufacturing operations at the Tapukara factory indefinitely. It currently sells around 4,000 units a month. The export order will help the company utilize more of its 200,000 units a year crankshaft manufacturing capacity at Tapukara.
The order also integrates the Indian subsidiary into Honda’s Asia supply chain, the company said in a press statement.
Separately, Takedagawa said that the company would look at components it could source from Thailand. India and Thailand have recently lowered duty rates for several items including auto parts.