After a downward revision of the Jazz's prices, Honda faces challenges at the supply end with demand exceeding expectations. According to a report on Live Mint, the Jazz is sold out till March 2012 and Brio till January 2012. But there's a catch.
Despite a recent hike in the level of localization, there are certain electronic components for the mini cars that come from Japan. The country is still recovering from the double header that rocked the country in the form an earthquake and Tsunami during March this year. As Japan limps back on to its feet, another ecological disaster has struck Honda SIEL.
Heavy rains has caused severe flooding in Thailand, an important sourcing base for Honda in India. Visuals on television showed manufacturing parks submerged in the uncontrollably rising levels of water that brought parts of the country to a standstill.
Mr Jnaneswer Sen, the man at the helm of the Indian wing's marketing division terms the situation "grim" as both Brio and Jazz depend on the affected Thailand for few of its components. Honda is still assessing the situation and the extent of the impact is yet to be understood.
Floods aside, they told the newspaper that starting the second shift at Greater Noida next month onwards will enable the roll out of about 10,000 cars, until the inventory lasts, to take care of the demand. For Honda, Diwali continues in November.
After the Japanese tragedy many companies have been forced to look at alternative arrangements for parts sourcing. Setting up of regional parts hubs to spread the risk sounds like a good idea but short-term arrangements have to be made by the time this long-term fix is in place.
[Source - LiveMint.com]