The Hindu Business Line : Honda Siel to begin auto component exports

Initially, the company intends to export crankshafts and connecting rods – both engine components – but would later look at other products, the company’s President & CEO, Mr Masahiro Takedagawa, told Business Line today.

Honda Siel would kick-off exports with an initial volume of 20,000 units of each product a year. These products would be supplied to Honda’s other plants in Asia.

That Honda would export engine components assumes significance against the backdrop of fears expressed when India entered into a Free Trade Agreement with Thailand – that India would be swamped by auto components imported from Thailand, because Japanese companies such as Honda and Toyota have components manufacturing facilities there.The FTA, it was feared, would dis-incentivise indigenisation.

“We will not only localise but will also export engine components,” Mr Takedagawa said today. Exports, he said, was feasible because steel is available in India, unlike in countries such as Thailand and the Philippines, where a manufacturer would have to import the raw material.

The cars that Honda Siel makes have a relatively high degree of local content. For example, the new version of the Honda City, launched a few days ago, has local content of 80 per cent in value terms.

(The car costs between Rs 7.9 lakh and Rs 9.1 lakh.) A third of the Rs 18-lakh Honda Accord is ‘Indian’.

The ‘Jazz’, which is likely to be launched in mid-2009, is also expected to start off with a local content of about 70 per cent. What Honda Siel imports is mostly components of the gear box, which Honda has not been able to localise as yet, due to “quality and technology issues”. “If the quality issues are sorted out it would be beneficial in the long run to export engine components from India,” he said.

R&D

Honda Siel has set up a R&D centre at its Noida facility to pursue some special assignments from its parent company, Honda Motor Corporation, Japan. Mr Takedagawa said the company has created a team comprising four Japanese engineers and six Indian engineers. Initially, the team would look at opportunities in alternate materials besides working on localisation and exports of components.

More Stories on : Announcements | Automobile Components | Exports & Imports | Cars

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page