Honda had two production plants in India – One at Greater Noida and the second one at Tapukara District of Rajasthan.HCIL has decided to shut down its production plant at Greater Noida. Henceforth, all of Honda’s manufacturing activities will take place at the Tapukara plant. The Tapukara plant has a capacity of 1.80 lakh units per year.
The Greater Noida plant was home to Honda City, Honda Civic and Honda CRV. The Honda City production will continue at the Tapukara plant. However, the manufacturers have decided to stop the production of Honda Civic and Honda CRV for the Indian market.
The Greater Noida facility will continue to run its Research and Development Centre. Along with that, the centre will also operate its spare part supply for automobiles, two wheels and other power products.
Why Did the Plant at Greater Noida Shut Down?
The Honda company has an average of three million a year passenger car sales in the Indian market. However, their latest news about closing the Greater Noida plants has raised many speculations about the company losing a major chunk of the Indian market. However, the reduced efficiency of the Greater Noida manufacturing plan coupled with the low sales of Honda Civic and Honda CRV has been a major reason for the recent decisions. India’s sixth-largest company had to shut down its Noida plant and stop the manufacturing of these two cars to sustain in the competitive market.
The Civic and CRV contribute to only three percent of Honda’s monthly sales. Honda sells around 250 units of the Civic and CRV every month. The Honda Civic is a part of the D segments and competes with two other strong competitors- Skoda Octavia and Hyundai Elantra. Toyota halted the production of Corolla Altis which was also a part of the D segment. Honda Civic managed to sell only 200 units per month.
In comparison to the Honda Civic, the CR-V is more competitive. The Honda CR-V manages to sell around two thousand units every month. Toyota Fortuner, Ford Endeavour and MG Gloster are the competitors to Honda CR-V.
Even though automotive sales have increased in the last three months, the unpredictability of the current market is a major reason for this decision. HCIL President and CEO Gaku Nakanishi have confirmed that Honda has decided to consolidate its manufacturing processes and has made the Tapukara plant its unified manufacturing base in India. The Covid-19 impact has compelled the company to make such tough decisions and strengthen its efficiency.
Nakanishi also added that the company has reinstated its sales to the pre covid times in the last three months. The sales have increased in the festive season and are expected to keep growing in the subsequent months. Honda will be raising its car prices from January 2021.
Honda Cars Sales Reduce by 78% in March 2020
The current global pandemic situation has drastically affected the automobile manufacturing industries all over the world.HCIL sales had received a major setback with a 78 percent reduction in its total sales during March 2020. In March 2019, the company had managed to sell 17,202 units as compared to the 3697 units it sold in March 2020. In the fiscal year 2019-20, the company had sold 1,02,016 units.
At 1,83,807 units, the company sold 44 percent more units in 2018-19. The 2019-20 financial year had been a challenging year for HCIL. The economic slowdown reduced consumer sentiments and the BS-6 compliant transition were some of the major reasons for these reduced sales. The unfortunate COVID 19 had resulted in reduced business all over the world. Despite the lockdown, HCIL managed to achieve its annual business target for 2019-20.
HCIL has reportedly managed to have a 55 percent growth spike in November 2020 as compared to November 2019. Honda had sold around 9 990 units in November this year against the 6459 units in the same month of the previous year. Similarly, in October 2020 HCIL bagged an 8.3 percent growth as compared to October 2019.
HCIL launched a revamped Honda Civic model in March 2019. The latest model was reintroduced after seven years with a diesel engine. The front has an angular bumper and LED headlamps. The rear end has displayed C shaped LED taillights. The 17 inches diamond cut wheels are dual tone with five spokes. The car also has its 7-inch touchscreen infotainment system with Apple care and Android Auto. Other salient features of the car include cruise control, 8-way adjustable driver’s seat, electric sunroof, dual-zone climate control and smart key engine on and off feature.
The new Honda Civic also displayed six airbags, ABS, EBD, Agile Handling Assist, stability control and hill start assist along with some features like the lane watch camera assist and electric parking brake. The car has received a five-star safety rating. The car has a 1.8-litre four-cylinder petrol motor that generated 139 bhp at 6,500 rpm and 174 Nm of peak torque available at 4,300 rpm. The new Civic also gets a 1.6-litre i-DTEC diesel engine that generates 118 bhp at 4,000 rpm and 300 Nm of peak torque at 2,000 rpm.
Despite the plethora of features mentioned above, the car managed to generate less sales.2291 units were sold in March 2019. As soon as the initial excitement died, the sales plummeted. In April 2019, only 369 units were sold. By the end of 2019, 178 units were sold in December 2019. Many avoided the car due to confusion rising from the BS6 complaints regulatory guidelines. Moreover, the Covid 19 pandemic situation drastically affected the Honda Civic sales in India.
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Honda CR-V was launched more than ten years back. Initially, the SUV did well in the Indian market with its petrol engine. However, it lost its market place due to the major shift of most automobiles towards diesel engines.
As of now, the CR-V has a diesel engine and comfortable spacing. The car has a two-tone front fascia with a trapezoidal grille and three horizontal chrome slats. The projector headlamps have DRLs and the lower half has a three-part air dam with fog lamps.
The SUV has a higher ground clearance and bigger wheels. The interiors are plush with leather upholstery. The interiors are further enhanced with automatic climate control, electrically adjustable and foldable wing mirrors, steering mounted audio controls, cruise control and push-button start. The top variant also gets a touchscreen infotainment system.
The safety specifications of the car include six airbags standard along with ABS and EBD for occupant safety, Rear parking sensors, reverse camera and manual height adjustment for the driver seat. It has a 2.0-litre four-cylinder petrol engine that generates 154bhp of power and 190Nm of torque. A few variants also offer a 1.6-litre four-pot diesel engine that has the 118bhp and 158bhp setups.
The pandemic has majorly affected the Honda CR-V sales in India that could be one of the major reasons for HCIL to discontinue SUV manufacturing. The SUV sales have dipped considerably in comparison to its competitors like Ford Endeavour, Tata Harrier, Volkswagen Tiguan and Toyota Fortuner. Even before the Covid-19 outbreak, Honda CR-V had lost the market to its competitors. Covid-19 made the recovery and an Indian market come back more impossible for CRV.