Earlier last week, Honda had reported that they were forced to stall production of their new small car, Brio because of no supplies. Honda imports supplies for manufacturing Brio in India from Thailand, and due to the recent Thai floods, spares suppliers in Thailand are unable to supply spares. This has resulted in a massive jolt to Honda production not only in India but worldwide.
Mr Jnaneshwar Sen, VP, Honda Motors India had stated late last month that they are looking to get help from suppliers in China and Japan as soon as possible. Mr Sen said, “We are looking at China and Japan very keenly. We hope to firm up things soon and return to normalcy in the coming months, though nothing can be confirmed as of now.”
This month is the worst in the history of Honda India as far as production is concerned. City and Brio production have already been stalled. Production of Jazz this month will be around 250 units while that of Civic and Accord will be at 100 to 200 units. Honda stated that, “The situation is very bad and December could perhaps be one of the worst months for Honda in India.”
But there has been some good news lately. Mr Sen stated earlier today, “We have been trying to source from alternative destinations like Japan and China parts that we now import from Thailand. 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.”
Honda plant in Thailand is the worst affected and will need a minimum of 6 months to be completely restored and resume production to capacity. This is why alternative resourcing of spares is of critical importance to Honda as of now.
This year has not been good at all for Japanese car manufacturers. Earlier at the start of the year, Tsunami and earthquake rocked Japanese shores and later this year, Thailand saw worst flood situation in the last 70 years. “Because of the earthquake and tsunami in Japan we cut production in April, May and June by 50%. 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,” added Mr Sen.
As of 15 November, Honda had accumulated over 7,500 booking orders for their small car Brio, of this, 1,800 units have been delivered. Honda added that they will be clearing pending Brio deliveries by April 2012. Honda dealers in India are still accepting Brio bookings, but they are not accepting Jazz bookings. Rumors suggest that Honda is planning on stalling Jazz completely in India.