Though Honda Siel Cars India has stopped production of its just-launched Brio, it is not looking at suspending bookings for the small car.
The company - severely hit by the floods in Thailand, the only country which sells Brio apart from India and from where Honda sources critical parts - says it has finalized alternative sourcing arrangements and should be able to return to normal production by February or March. Honda has also suspended bookings and production of Jazz hatchback.
“We have been trying to source from alternative destinations like Japan and China parts that we now import from Thailand,” said Honda Siel senior vice-president Jnaneswar Sen said.
“The arrangement is almost done and the manufacturing and purchasing teams are putting finishing touches to the recovery plan. Right now we are not making Brio and only producing very small numbers of Jazz. We will start the ramp up of production by end-January first with the City,” he said.
Unfortunately for Honda, Brio is available only in two markets - Thailand and India. Which is why it could not do what fellow Japanese biggie Toyota has done with its sourcing in India: divert parts intended for other markets to feed Indian plants. The flood situation in Thailand is now under control, the plant there will be out of commission for around six months or so. Alternative sourcing arrangements are therefore critical for Honda.
The Thai floods came at the worst possible time for Honda Siel which has already battled huge production problems due to the earthquake and tsunami in Japan earlier this year. “Because of the earthquake and tsunami in Japan we cut production in April, May and June by 50 percent,” Sen said.
“And we could only make limited numbers of the Brio in September and October. Even the relaunched Jazz faced supply constraints. We were planning to ramp up production of both Jazz and Brio in November with a second shift when the Thai flood situation once again derailed plans,” said Sen. Brio was launched in September and the face-lifted Jazz in August.
The Thai floods hit Honda Siel production so badly that it managed only 2,000-odd units of sales in November; production was actually a little lower than that. The company sold 31,699 units in the April-November period, down from 39,551 units sold in the same period last year.
Till mid-November Brio bookings stood at 7,500 units of which the company managed to deliver 1,800 units to customers. Right now deliveries have stopped and company officials say it will probably be able to clear its bookings backlog by April.
Brio bookings are still open but dealers are not pushing sales because there's no clarity about deliveries. But, Jazz bookings have been suspended.