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Old 28th January 2020, 17:20   #1
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Default Honda Cars India floats VRS scheme for its manufacturing staff

The Greater Noida plant is already running on a low capacity with its flagship City sedan among Honda’s top-selling models produced here.


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New Delhi: Citing the ongoing slowdown in the Indian automobile sector, Japanese carmaker Honda Cars India Limited (HCIL) has floated voluntary retirement scheme (VRS) for its permanent employees (for manufacturing) at Greater Noida plant, effective from January 28, 2020.

According to the letter issued by HCIL on Monday, the scheme has been floated in agreement with workers' union of the company and will be applicable to all the associates at the Greater Noida manufacturing facility. Its second plant at Tapukara in Rajasthan has been kept out of the VRS for the time being.

“The Voluntary Retirement Scheme has been offered to our manufacturing associates which is a regular industry practice to increase efficiency and productivity in operations. The scheme is fully voluntary, and benefits offered have been developed after taking suggestions from many associates so that it provides a win-win situation for both the organization and the associates. The scheme will provide an opportunity to our manufacturing associates to take pre-retirement from the company and explore new dimensions in their life and career,” a company spokesperson confirming to ETAuto. The carmaker has about one thousand permanent employees in manufacturing who can be part of the scheme.

The scheme will be applicable to all those who are permanent employee of the company till January 27, 2020, and it will be effective till February 17, 2020. The company claims to be offering up to a sum of Rs 50,00,000 to the employees, based on their seniority and total number of working years.

Apart from this compensation, the VRS seeking associates will also get Rs 88,000 for their health insurance or insurance till the retirement age of 58 years whichever is lesser. Additionally, the applicant will also get the acquired salary and benefits against acquired leaves, gratuity etc as part of the broader compensation.

The carmaker currently produces Civic, CR-V and City models from the Greater Noida plant. According to industry sources the plant has been producing about 80-100 units daily and the Honda City sedan. However, the fifth generation City which will debut next month is likely to be rolled out from the Tapukara plant, thus putting a question mark over the continuity of the Greater Noida plant with such a low volume that would eventually make it commercially unviable.

The company is not participating in the upcoming Auto Expo on a drying pipeline of new products and dwindling demand of the existing model lineup.

Its high volume models like Amaze compact sedan, WR-V crossover are already produced at the Tapukara Plant. Honda Cars India have facing huge demand crunch as in December its domestic wholesale dropped by 36 per cent to 8,412 units. The decline happened largely on the absence of the current market sweet spot, the compact SUVs from its portfolio, which HCIL currently lacks nor has any immediate plans to introduce for the Indian customers.
Source: ET Auto



Last edited by benbsb29 : 31st January 2020 at 23:59. Reason: Replacing USA dealership pic with one from India :). Thanks for sharing!
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Old 28th January 2020, 17:35   #2
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

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Sighting the ongoing slowdown in the Indian automobile sector
Easy to blame the slow down - but the fact is that Honda's own choices led to this situation. They refused to invest in SUVs despite the visible trend and also compromised their lead position in the sedan segment.

Only three cars in the Honda stable have crossed four digit sales in recent times.

Unlike the last generation City which had good sales leading up to the generation change, the current generation is clearly struggling and being continuously outsold by both the Hyundai and Maruti competition (once clearly unthinkable!). WRV had a good initial run, but is just hanging on to four digits these days and the only real strong seller is the new Amaze.
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Old 28th January 2020, 17:44   #3
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

They made bad choices again and again. Instead of going cheap to compete the market leader they should have stuck to their strengths.

Had they launched the Pilot to compete Innova or HRV to compete Duster/Creta, it would have been a different game altogether.

Instead they chose contraptions like Amaze and Mobilio.
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Old 28th January 2020, 17:53   #4
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

Even if we park their absurd overpricing for a moment, they made some horrible product/feature choices to protect the City, their historical bestseller but in a segment that's perennially under threat these days with C-SUVs taking over. Definitely not worth sacrificing other segments over, not anymore.

The Jazz and its derivative WR-V, with 1.5 Petrol CVT powertrains could've sold really well, but Honda didn't even try, in a segment where even VW manages to sell a ~12L rupee Polo TSi in decent numbers.

The employees are getting hard done by, but it's difficult to sympathize with Honda, they're engineering their own demise.

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Old 28th January 2020, 18:03   #5
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

From a desirable car brand, they went to Brio>Mobilo>Amaze>BR-V>WR-V route. Quality went down, overpriced, and dealer experience is really bad at some locations. They took the 'magic' out of current Jazz and decided not to launch new Jazz here in India. They could have considered Jazz cross at least.
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Old 28th January 2020, 20:05   #6
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

Honda now, it was Toyota earlier with the Voluntary Separation Scheme rolled out during October 2019. February 2020 there will one more rounds of this scheme.

With Plant 2 being handed over to Maruti, it is expected to have more automation resulting in lesser man power requirement.
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Old 28th January 2020, 20:43   #7
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

Behind every such VRS scheme, surely must be lurking plenty arm-twisting, forced resignations, layoffs on flimsiest of grounds, and of course, a few genuine VRS cases too! Many of the skeletons might never be out of this closet, but I am guessing quite a few of the employees will be lapped up by the Chinese firms that have been moving in.

We have also seen examples of Honda leadership in the recent past where they have been caught with their heads stuck too far under rocks (questioning EV relevancy). The VRS news then does not really come as a surprise. They need a major shakedown in leadership and get people connected to the real world.
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Old 29th January 2020, 00:03   #8
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

Wonder how long Honda will survive in India. They have brought it upon themselves. If they had a Jazz and WRV with 1.5 L engine plus CVT, they would have sold well. In their bid to protect their City, they lost premium hatch buyers and mini-SUV buyers to rivals. How much more pea-brained can they get?

Except Maruti, all Japanese are losing steam. Toyota is all about just Innova and Fortuner to some extent, which is under attack from new Endeavour. Mitsubishi is all gone and Nissan soon may. Speaking of Mitsubishi and Nissan, it seems they didn't want to come to India on their own. It looks like they were dragged to India kicking and screaming and it shows in the way they ran things here.
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Old 29th January 2020, 07:08   #9
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

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From a desirable car brand, they went to Brio>Mobilo>Amaze>BR-V>WR-V route. Quality went down
There is not a single Honda car that has "desirability" wrapped around it today. There is not one Honda model that I find appealing today. This is sad. At one time, Honda had 4 cars in India (City, Civic, Accord, CR-V) and all of them were no.1 or no.2 of the segment.

Honda has completely lost its edge, its technological leadership & its famed quality. The Indian arm has "cheapened" the brand entirely. Short-term gains, long-term losses.

Just look at what the others have done - Honda could have easily too if it wanted. Taken the 15-lakh segment by storm as the Seltos did? I don't see why not. A proper EV like the Kona? Heck, Hyundai did it and Honda only watched. Maruti's 1.5L diesel is superior to Honda's in almost every way. Even in the all-too-important Compact SUV segment, I would buy the EcoSport or an XUV300 over Honda's offering.

Safety? We've seen 5-star cars from Tata & Mahindra, but none from Honda.

And just see the missed opportunities. Hyundai got the Creta so many years back and did amazing volumes, but zero response from Honda. India loves its MPVs, as the Ertiga has shown. Honda brought the Mobilio with several quality flaws & a stupid price-tag, thereby losing the segment entirely.

I honestly don't know what Honda India stands for today. This is coming from an ex-owner of 3 Hondas (City, Civic, Accord). The company has disappointed me big time.
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Old 29th January 2020, 10:03   #10
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Honda has completely lost its edge, its technological leadership & its famed quality. The Indian arm has "cheapened" the brand entirely. Short-term gains, long-term losses.
I saw a 3rd gen and 4th Citys parked together, both very well maintained, owned by two friends. To be honest, the 3rd gen City felt more 'fresh' and solid, compared to the current iteration. The paint quality was significantly better in the former, too.

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Taken the 15-lakh segment by storm as the Seltos did?
Honda has so much R&D power I wonder what has stopped them, and they just ended up bringing the 'meh' BR-V.

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A proper EV like the Kona?
Honda is launching the really cute looking E, which could be a Halo model. Even if it fails, it could be a good brand building exercise.

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Maruti's 1.5L diesel is superior to Honda's in almost every way.
I don't think, even 5 years ago, that Suzuki would be building far superior engines(except for the K12) than Honda. Even internationally, rivals have caught up and passed Honda on this front.

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We've seen 5-star cars from Tata & Mahindra, but none from Honda.
Judging by the way it is heading, I don't think we ever will.

I would like to say this to Honda bluntly, you've gone from being an aspirational brand to a brand that is lazy and arrogant which overprices most of it's offerings, while also skimping on quality. Like FCA, you're incredibly slow to react to market trends. Sorry, but in nearly every segment, there is no reason to buy a Honda, when there are far superior products in the respective segment. I've said this before, and I say it now, Hyundai has become the new Honda. I was a Honda fanboy back until the original Civic was discontinued, and except for a few magazines such as Car & Driver in USA, almost none of the journalists hold the company in high regard as they once did.
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Old 31st January 2020, 09:21   #11
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

IMHO, Honda have transformed themselves from a desirable brand to a 'cheap' brand in India. I think even KIA has more desirability in our market now.

There may be many reasons for the downfall, For me , the following reasons stands out

1. Reluctance to change according to the market requirement : When the market went crazy for Diesel engines, Honda had none. Same with SUV's, Compact SUVs and MUV's.

2. Taking the customers for granted : They did cost cutting in many places and over priced their products at same time (It's a Honda ) , Coupled with bad quality, products like Amaze (1st gen) and Mobilio were destined to fail. They have managed to dent the brand reputation too.

3. Quirky and overdone styling : I hate all the current cars of Honda on sale in India. Too many design elements, cuts and creases. Old civic still looks a class of its own.

4. No USP : Earlier Honda's main USP used to be the quality, reliability, technologies and engines. But I don't think any of them are valid now.

Eg. Maruti have their A.S.S, Fuel efficiency , Tata have the safety and great designs lately, Hyundai have the quality , fit and finish etc.
I can't see any of them as a USP for Honda.

Hope Honda realizes the situations they are and acts accordingly.
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Old 31st January 2020, 09:35   #12
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

The one positive that Honda has is that it has models which have the potential to change its fortunes. It should launch the XR-V, Freed, and the e in India to fill the gaps in its range.
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Old 31st January 2020, 09:40   #13
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We have also seen examples of Honda leadership in the recent past where they have been caught with their heads stuck too far under rocks (questioning EV relevancy).
Not that this is going to change anything for Honda in India. I sure am glad to see the Honda E finally hit the road and it is not too far off from the original concept.

https://www.honda.co.uk/cars/new/honda-e/overview.html
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Old 31st January 2020, 10:39   #14
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Feels really sad to see Honda in their current state. Being an owner of Amaze that has run more than 1,00,000 kms, I can safely say that their engineering is still very good. I never had reliability issue with my car for 6+ years of ownership.

I am sure many would agree that their engineering division was one of the best in business till recently. Just to quote few examples - the gem-of-a-petrol-engine in City. Not to mention their amazing space-management in cars like Jazz (remember the magic seats?) and Amaze.

As many have mentioned here, in their bid to get into volume race, they put engineering and quality on lower priority and the results are there for everyone to see.

Having said that, it is not too late for them to make turnaround. If they make radical changes to their India product line and quality strategy, they can still get back to their golden days. Else, they will be at best a case study in one of the B-schools for how-not-to-run-car-company.
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Old 31st January 2020, 11:51   #15
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Default Re: Honda Cars India floats VRS scheme for its manufacturing staff

It's saddening to see Honda nose-dive so horribly. Apart from the fantastic drivetrains and feature-rich list, all their vehicles looked stunning at one point. Be it the City, the Civic, C-RV, Accord, or even the previous Jazz, for that matter. And, then came this new flush of cars like the Mobilio, the previous-gen Amaze, and BR-V, that didn't look anything like a Honda and felt cheap on the inside as well.

I don't think any potential customer who opts for a Honda product buys it with the desirability quotient in mind. The only saving grace was the City, but even that isn't doing well; and, seeing the next-gen City's neutral looks, I don't see Honda grabbing back its market share anytime soon.

Would love to see this brand succeed in India, nevertheless. Get the E EV to India, Honda, and start afresh in a segment that will boom very soon. Don't disappear into oblivion due to poor decisions.
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