Honda has put the commencement of production at its new manufacturing line in Gujarat factory on hold for now. The two-wheeler giant has taken this decision because the overall demand in the market has shrunk thanks to Covid-19.
Honda currently has a total of four manufacturing facilities in India located at Manesar in Haryana, Tapukara in Rajasthan, Narsapura in Karnataka, and Vithalapur in Gujarat. The combined annual production capacity of these plants is 64 lakh units. Now, to add 6 lakh units to this figure, Honda has created a new line (called the third line) at its Gujarat plant.
The construction and other activities related to Honda’s third line at its Gujarat manufacturing facility had been carried out as per the original schedule. However, considering the falling demand in the market, Honda has put on hold the decision on when to start production at its third line. Honda’s existing production capacity is more than sufficient to meet the current market demand.
Speaking on this matter, Yadvinder Singh Guleria, Director - Sales & Marketing, HMSI, said:
As for our new line which we had made in our fourth factory in Gujarat, we call it our third line. The construction activity and other activities went on as per schedule. However, we have put on hold the decision on when to start production at that line because the overall market has shrunk. In terms of demand, the existing lines and existing capacity are good enough to take care of the current demand, which is going to be maintained for the next two years or so. It depends on how quickly the market rebounds and the new demand shoots, green shoots visible to us. That is the only time we will decide to start production in the third line. From today's point of view, since the overall market condition is very fluid and a lot of unpredictability around, it looks like two to three years.