Honda Cars India has stopped manufacturing operations at its mother plant in Greater Noida in Uttar Pradesh. The move comes after Honda’s failure to utilise maximum capacity at the plant, owing to a significant drop in demand for its models over the last few years.
While the entire manufacturing process will now be restricted to Honda’s second plant in Tapukara in Rajasthan, business functions such as purchasing, R&D, finance, sales and marketing and human resources are expected to continue to operate from the Greater Noida unit, for the time being.
HCIL had begun issuing lucrative voluntary retirement schemes (VRSs) to its existing employees across manufacturing and related operations as early as January 2020, in order to streamline its workforce as it gradually moved towards ceasing production at this 150-acre, 1,00,000-unit capacity plant, established in 1997.
Even after having a longstanding presence of over two decades, positioning itself as a premium carmaker and witnessing some initial success with models such as the Honda City sedan, Civic, Accord and the CR-V, of late the company has been facing tough times.
Sales of its bread-and-butter mid-size sedan – the City – are being threatened by the onslaught of mid-size SUVs such as the Hyundai Creta and Kia Seltos, whereas competition in other product segments is also growing fiercer.
Asianet.in/NewsDesk: Asianet Online