Honda may delay expansion plan in India amid auto sales slowdown

Indian Road Transport and Highways Minister Nitin Gadkari (2nd from R) joins executives of Honda Motorcycle & Scooter India Pvt. Ltd., Honda Motor Co.'s local subsidiary, at a launch ceremony for Honda's first tighter emission standards-compliant scooter Active 125 in New Delhi on Sept. 11. (Photo courtesy of Honda Motorcycle & Scooter India)

By Atul Ranjan

NEW DELHI, Sept. 12 Kyodo - Honda Motor Co. may go slow on its capacity expansion plans in India due to a marked slowdown in auto sales.

Its wholly owned subsidiary, Honda Motorcycle & Scooter India Pvt. Ltd., may delay a plan to boost production capacity by 600,000 units at its plant in the western state of Gujarat by the end of next fiscal year.

“We already have two production lines in Gujarat, the third line is now under construction which is likely to be finished by the middle of next year,” Minoru Kato, president of Honda’s Indian arm, told NNA on Wednesday.

“But because of the current market scenario, the production may not start...it’s likely to get delayed,” Kato said on the sidelines of the launch of Honda’s first tighter emission standards-compliant scooter Activa 125 in New Delhi.

Honda noted that the third production line was to increase total annual production capacity of its scooter-only plant in Gujarat to 1.8 million units from the current 1.2 million units by the next fiscal year ending March 2021.

Honda’s Indian unit has four plants in the South Asian country, including the Gujarat-based plant, with a combined production capacity of 6.4 million units.

Its domestic sales in the first five months of the current fiscal year ending March 2020 dropped nearly 20 percent to about 2.2 million units, compared with the same period of last year, according to the Society of Indian Automobile Manufacturers.

As a result, Honda was forced to cut its output by 18.2 percent during the same period to adjust to the falling demand.

Meanwhile, Honda launched the Activa 125 ahead of the Indian government’s deadline of April 2020 to change from the current emission regime to much stricter emission standards, anticipating demand for new scooters during the festive season from this month to October. (NNA/Kyodo)

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