Uncertainty over resumption of normal operations in India: Honda

New Delhi: Japanese auto major Honda on Wednesday said its decision to reduce car production in India by 50 per cent from this month is likely to continue for the next three months due to parts supply constraints after the devastating earthquake and tsunami in the island nation.

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 one lakh units per year.

“The supply situation is not good at present and so we had announced to cut production by 50 per cent from May, although we started the exercise from middle of last month. We expect this situation to continue for the next three months,” Honda Siel Cars India (HSCI) Senior Vice President (Marketing and Sales) Jnaneswar Sen told PTI.

The resumption of normal production after three months will depend on the recovery of suppliers affected by the natural calamity and there is uncertainty on this, he added.

Under this trimming of output, the company moved to single shift operations from May, 2011. Prior to this production cut, the HSCI unit at Greater Noida was rolling out about 5,000 units every month. The company imports various components from Japan such as engine parts and electronics.

The company 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.

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

Honda Motor Co had also announced a cut in production at its plants in Japan following a shortage of components due to the impact of the tsunami on its parts suppliers.

The company had earlier said most Japan-based suppliers are making progress on restarting production and many either have or are ready to resume parts production. However, there are a few suppliers that are yet to overcome the challenges to resuming their operations.