Honda to ramp up production for Brio and Jazz as demand spurts
Honda India will invest generously to increase the production of its two hatchback cars in India: Honda Jazz and recently launched Honda Brio to meet their whopping demands. Both the hatches are performing well in Indian car market and most of the dealers have announced the waiting period of four to five months for these cars. In order to tap international markets, Honda India has started exporting Honda Brio to RHD markets like Nepal and would gradually extend to Sri Lanka and Bhutan. If sourced are to be believed, Honda was also working on a sedan positioned below its current best-seller Honda City.
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Honda is ramping up the capacity at its Noida facility which is also its headquarter, to generate more units of the two petrol-driven cars Brio and Jazz, so that Honda India will be able to make use of the festive demand and buck-in some handsome profits. Honda India is a Japanese company, which operates through a joint venture in India. Takashi Nagai, President and Chief Executive of Honda India said that the joint venture plant capacity was 1,00,000 cars per year. If Honda Brio sells more than 40,000, Honda India might be able to take the next step of expanding further. Before the launch of Honda Brio, the company was utilizing 60% of the plant capacity producing 60,000 cars per annum to make models like Honda City, Honda Civic, Honda Jazz and Honda Accord. But now, with the positioning of Honda Brio below the Rs 4 lakh price mark, Honda India hopes to sell more than 5,400 units of the small car every month.
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Even Honda Jazz, after a massive price cut of Rs 1.6 lakh in August, is witnessing burgeoning demand as the hatchback is now available at Rs 5.5 lakh at any ex-showroom in Delhi. Along with Honda Jazz, Honda adopted the strategy for Honda City also and cut the price of the sedan by Rs 66,000. The company’s second plant in Rajasthan’s Tapukara, which was inaugurated in 2008, does not currently produce any vehicles. The unit only makes critical parts for all Honda cars in India and for export markets. Nagai said that Honda has not finalized the investment or expansion plans at Rajasthan. However, the company will carry out a feasibility study to make investments at Rajasthan in order to scale up its capacity to accommodate future models. Honda India is not mulling to introduce models using the Brio platform but investigation can be continued if customer demand persists. With the advent of diesel engine range at a later date, opportunities of expansion at the 600-acre Rajasthan plant will fume.
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