Honda to cut production in India


Auto major Honda Motor Co today said it will cut production in India by 50% from May due to components supply constraints, after the devastating earthquake and tsunami in Japan last month.

The company, which is present in India through a joint venture with the Siel Group -  Honda Siel Cars India (HSCI), produces cars at its Greater Noida plant that has an installed capacity of one lakh units annually. Last year it had sold about 60,000 units in India.

"We are experiencing gaps in our supply chain due to the situation in Japan, resulting in production cuts. We are moving to single shift operations from May, 2011, while carefully monitoring the situation," HSCI Senior Vice-President (Marketing & Sales) Jnaneswar Sen said in a statement.

The announcement comes following a production cut by Honda Motor at its plants in Japan following a shortage of components due to the impact of the Tsunami on its parts suppliers.

"The situation with parts supply in Japan remains fluid, production of component parts and vehicles at Honda plants is at approximately 50% of the original production plan," the statement said.

Honda will carefully monitor the situation and manage its operations accordingly, it added.

Most of Japan-based Honda suppliers are making progress to restart production, and many either have or are ready to resume parts production. However, there are a few suppliers that have yet to resolve the challenge to resume their production, it said.

The company said Honda was working with its suppliers to help re-establish their operations, while evaluating other possible sources for those parts in the supply chain.

"We plan to get back to normal production as soon as supplies normalise," Sen said.