Honda Siel Cars hopes to resume its peak output of 9,000 to 10,000 units a month by March after managing to secure alternative sources of component supplies that were disrupted because of floods in Bangkok last year.
The component supplies, mainly electronic and underbody parts, will now come from Japan and China, which will enable Honda resume full-fledged production and cut the waiting period for its cars.
"Now that we have secured alternative sources of supplies, we hope deliver as many cars as possible to our waiting City, Jazz and Brio customers," Jnaneswar Sen, senior VP sales and marketing, said.
Honda will decide on setting up a production line at its second plant in Tapukara, Rajasthan, once its production peaks, said Sen, adding that the company will step up its efforts to localise to de-risk itself from global supply and currency risks.
Honda has already begun production of the New City while the rollout of small cars Brio and Jazz will start by the middle of next month. The company has bookings of 7,500 Brio, 4,000 Jazz and about 2,000 units of the New City. The waiting period for Brio and the new City is about four to eight weeks while that for Jazz is three to six months.
The company hopes to completely utilise the existing plant capacity of 1,00,000 units in 2012 and it is likely to take decision on further investment in its production line at the Tapukara plant by middle of 2012. "We hope to completely utilise our plant capacity this year. For us, the entire effort will be on giving a rebirth to Brio, which we are confident will drive the volumes," said Sen.
Although Honda Siel sales had declined 3.8% to 59,463 units in 2010-11 from 61,815 in the previous year, the company was banking on Brio to boost sales in the current fiscal. But 2011-12 proved to be one of its worst years as production was severely hit because of the tsunami in Japan and then floods in Bangkok. Honda operated at less than 50 poercent capacity in as many as six months of this fiscal.