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After watching competition run away with the spoils of a growing car market for over a year, Honda Siel is coming back with a bang.
With volumes for the Jazz hatchback looking up and the launch of the Brio around the corner, Honda Siel plans to increase production at its Greater Noida plant to one lakh units annually by December — a major milestone for the company. If that was not enough, Honda Siel is planning to increase the output to 1.2 lakh units annually, with the option of utilising its second plant at Tapukara, Rajasthan, if necessary.
This is a big jump from the approximately 60,000 units it made at its Greater Noida plant last year; the output had dropped over the past few months.
“We expect to expand annual production to 1 lakh units by November-December and we can stretch that by a further 20 per cent through production efficiency. It will also take around three more months for the component supplies from Japan to normalise,” said Mr Jnaneswar Sen, Senior Vice-President, Sales and Marketing, Honda Siel Cars India (HSCI).
A positive sales outlook is on the back of a surge in demand for the Jazz premium hatchback, after prices were slashed by upto Rs 1.6 lakh a few days ago to a starting price of Rs 5.5 lakh. This follows a drop in prices of its top-seller — the City — by around Rs 66,000 in mid-June, after which sales of the sedan rose 46 per cent to 4,092 units in July.
Higher production is also in preparation for the launch of its first mass-segment model — the Brio compact — next month. Moreover, component supplies from Japan, which were affected after this earthquake this March, are now stabilising.
“Enquiry levels for the Jazz are now up 10 times, but we are falling short of supply. We're limited to producing only 500 cars a month, so till we expand production, we expect a waiting period for the Jazz. We expect to sell over 1,000 units from next year,” Mr Sen said.
A major reason for HSCI's sales taking a hit is because of the unavailability of a diesel model. As the demand for diesel cars have sharply risen on the cheaper pricing of the fuel as compared to petrol, the competition — such as Volkswagen, Maruti Suzuki and General Motors — has reacted with new diesel models and eaten away HSCI's market share across segments, an industry representative said.
“April to June sales this year have been very low, but now it is picking up,” Mr Sen said.
In the first seven months of 2010, the company had 35,111 units, a decline of 22 per cent from the earlier year.
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