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Old 23rd May 2015, 09:48   #1
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Default Honda to ramp up its dealerships & production capacity

Honda Cars India announced expansion of its production facility in Tapukara, Rajasthan with an investment of Rs 380 crore.

The company is planning to complete the expansion by mid next year, which will ramp up its capacity by 50 per cent to 1.8 lakh cars per annum.

"We will launch the third generation Honda Jazz in July this year and this car will be fully manufactured in Tapukara plant where we are increasing our production capacity from 1.2 lakh units to 1.8 lakh units per annum by mid-2016 with an investment of Rs 380 crore," Honda Cars India Senior Vice President and Director Raman Sharma said.
Source: ET

Last edited by GTO : 23rd May 2015 at 11:50. Reason: Keeping the fair usage policy in mind, it's best to share an excerpt + link to full article. Thanks
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Old 23rd May 2015, 12:09   #2
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Default Re: Honda to ramp up its dealership & capacity by 50%

Originally Posted by damager21 View Post
While increase in number of dealers will lead to increase in volumes, I wonder which other models will Honda launch requiring a capacity of 1.8 lakh units. Till next year, City and Jazz will sell in volumes while Brio, Mobilio and Amaze will see a decline.

The only other new launch in the horizon is compact SUV based on Brio platform. The other possibility I see is increased focus on exports from India.
Increase in dealers will definitely help in improving the numbers and Honda will have to compliment that by increasing the plant's capacity. Also, if I understand correctly, City still enjoys(??) a wait time of 2 months irrespective of the variants. This is for a car that is more than 1.5 years old. Also Jazz will have significant wait times till the expanded capacity is available. Noida plant will take care of Amaze + Brio + CRV assembly. If Amaze undergoes a face-lift and if Mobilio also inherits the changes, then there can be sustained demand for these cars. Honda should not increase the prices further though

If I understand correctly, they CANNOT produce the City / Jazz in Noida, they have moved all the tooling to Tapukara, once the plant was fully operational. I am sure Honda is launching Jazz only in July, but they are producing Jazz since April and they will be having around 10k Jazzs ready for dispatch by the time of launch. And every month they can make around 3k more, which will not be sufficient assuming there will be decent demand for Jazz, which will again lead to more waiting. This waiting will continue until mid-2016 when the expansion will be operational. So, the expansion is not really for exports, but primarily to fulfill local demand with lesser waiting and also have some open capacity for Brio based SUV.

I am very sure Honda is already working on its third plant. Otherwise, they might again face the issue of production constraint in an year or two.

This is how I view this whole episode.
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Old 23rd May 2015, 15:02   #3
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Default Re: Honda to ramp up its dealerships & production capacity

Yes, expanding the dealership network. However having two within 3km of Gomtinagar in Lucknow they want the third in the same area!
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