Why Honda Closing Its 23-year-old Car Unit In Greater Noida?
Honda Motor Cars, a big Japanese automaker, has decided to close its factory in Greater Noida, Uttar Pradesh, because of tough business conditions and tough competition. The stop comes just a few weeks after Harley-Davidson closed its factory in Haryana.
The Greater Noida plant, which can make a million cars a year, is one of the oldest car plants in India. It opened in 1997 and can make a million cars a year. The cash-strapped company is having a hard time keeping track of costs, so they are taking this step to save money and stop spending on things that aren’t necessary.
Honda sells cars like the City, Amaze, WRV, and Jazz. It will now make cars at its Alwar plant, which has a capacity of 1.8 lakh units per year, which is a lot more than the nearly 1 lakh units it sold in India in 2019-20.
Honda’s decision to leave Greater Noida comes a few months after it offered a lucrative VRS to a large number of its employees as part of a plan to become less reliant on the factory. When asked, officials from Honda refused to answer a long list of questions. Sources say that production will stop at the 150-acre facility, but there will still be a lot of official work and other things going on there.
“Honda will keep its research and development (R&D), corporate office, and spare parts operations in Greater Noida. “From that location, functions like purchasing, finance, customer service, marketing and sales, public relations, and human resources would also continue,” a source said.
Analysts in the business world said that Honda has “generally been slow to respond to competition and changing market needs,” which is why the company has been doing poorly and why the brand is having a hard time. The company has changed its top management several times in the past. At first, it was slow to bring diesel engines and vehicles to India, which hurt its business a lot.
Is Honda Shutting Down In India?
Is Honda Shutting Down In India: Honda Cars have said that it is still committed to India, even though there have been rumors that the Japanese automaker might close soon or stop making a number of its models by next year. The car company says it has no plans to close its business in India and, in fact, wants to grow it in the next few days. Takuya Tsumura, the President and CEO of Honda Cars India, told the news service PTI, “We’re going to stay. Why are we leaving a market that is the fourth largest in the world? We’ve lived here for over 20 years, so there’s no reason for us to leave.”
In India, Honda Cars customers can choose from models like the City, Amaze, WR-V, and Jazz. The Japanese automaker started selling a hybrid version of its best-selling car, the City, earlier this year. The Japanese car company will add a new mid-size SUV to its lineup in 2019. The new SUV will go up against Hyundai Creta and Kia Seltos, which are the best in its class.
Honda’s decision to stop making the Civic and CR-V in December 2020, after it shut down its factory in Greater Noida, started the rumor that the company would leave India. Honda Cars said that the decision was part of a larger plan to restructure around the world. “We did some restructuring in the last few years, and it was a bit of a rough time, but I can now say it’s done and the company has a healthy structure,” Tsumura said. Honda Cars also has a manufacturing hub in Tapukara, Rajasthan, which is near Greater Noida.
Honda Cars have tried making SUVs like the CR-V and WR-V, but they haven’t done very well in this market. The WR-V subcompact SUV hasn’t been able to make a name for itself in a market where Maruti Suzuki, Tata Motors, and Hyundai are the leaders. Honda, on the other hand, seemed confident about the chances of the upcoming Creta, which will compete with the Seltos. “Well, it would be hard to be number one, but there will still be some demand in that area, so we want to go after it,” Tsumura told PTI.
Most likely, the new SUV will have the same e:HEV hybrid drivetrain as the new City Hybrid sedan. Aside from the Korean SUVs, its main competitors will be hybrid SUVs like the Toyota Urban Cruiser HyRyder and the Maruti Suzuki Grand Vitara.
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