BackHonda Siel puts expansion plans on hold indefinitely
Honda Siel puts expansion plans on hold indefinitely
PremiumCutting back: Masahiro Takedagawa, president and CEO, Honda Siel India, says it expects to sell only about 55,000 units this fiscal. Ramesh Pathania / Mint
New Delhi: The India arm of Honda Motor Co. has halted plans to start a second factory in the country due to slowing car sales, a top official said.
“Our Greater Noida facility has a production capacity of one lakh units, but this fiscal (to March) we expect to sell only about 55,000 units," Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd said on the sidelines of an event of group unit Honda Motorcycle and Scooter India Pvt. Ltd. “We have not fixed any timeline for opening the second plant... It has been put on hold indefinitely."
The company also said it will increase the price of its sports utility vehicle CR-V by about 30% in May, taking its cost to nearly Rs30 lakh.
In December, the auto maker had said it was postponing the start of production at its second facility at Tapukara, Rajasthan, for six months. Its component suppliers have already set up shops there, and for the time being, they will serve its factory in Greater Noida on the outskirts of New Delhi.
This announcement comes less than a week after Honda said it is likely to cut production by 45% for at least six months. The company is currently making about 200 units a day. It had fired about 1,000 contract workers in August.
Honda Motorcycle and Scooter India, however, has kept its investment plans unchanged at Rs300 crore in three years, according to Shinji Aoyama, its president and chief executive.
The company launched Friday its CBR1000RR and CB1000R models in India, priced at Rs9.5-12.5 lakh. These so-called superbikes will be sold only in Delhi and Mumbai. The company estimates the market for such bikes at 400 units a year and aims to sell 100 of them in the first year.
(‘PTI’ contributed to this story)
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