AgenciesNEW DELHI: Hit hard by stiff competition and a challenging business environment, Japan’s auto major Honda Motor Cars has decided to shut down its factory at Greater Noida in Uttar Pradesh. The halt comes within weeks of Harley Davidson closing down its plant in Haryana.
The Greater Noida plant, with a capacity of 1 lakh units annually, has been one of the oldest car plants in India and was set up 1997. The cashstrapped company is facing a tough time in managing costs and is taking this step to save money and cut unnecessary expenditure. Honda sells cars such City, Amaze, WRV and Jazz, and will now manufacture vehicles at its Alwar plant, which has an annual capacity of 1.8 lakh units, much higher than the near 1 lakh units the company sold in the domestic market in 2019-20.
Honda’s exit from Greater Noida comes months after the company offered a lucrative VRS to a large section of its employees as it started taking steps to cut its dependence on the factory. When contacted, Honda officials refused to give answers to a detailed questionnaire. Sources said, while the production will be halted at the 150-acre facility, a large amount of official work and other activities will be carried out from the location. “Honda will continue to have its R&D set-up, corporate office and spare parts operations at the Greater Noida location. Functions such as purchase, finance, service, marketing and sales, PR and HR would also continue from the location,” a source said.
Giving reasons for the company’s poor performance, industry analysts said Honda has “generally been late in responding to competition and changing market needs”, which has led to the brand facing a difficult period. The company, which had several top-management rejigs in the past, was initially late in introducing diesel engines and vehicles in India that had impacted its business severely.
The Greater Noida plant, with a capacity of 1 lakh units annually, has been one of the oldest car plants in India and was set up 1997. The cashstrapped company is facing a tough time in managing costs and is taking this step to save money and cut unnecessary expenditure. Honda sells cars such City, Amaze, WRV and Jazz, and will now manufacture vehicles at its Alwar plant, which has an annual capacity of 1.8 lakh units, much higher than the near 1 lakh units the company sold in the domestic market in 2019-20.
Honda’s exit from Greater Noida comes months after the company offered a lucrative VRS to a large section of its employees as it started taking steps to cut its dependence on the factory. When contacted, Honda officials refused to give answers to a detailed questionnaire. Sources said, while the production will be halted at the 150-acre facility, a large amount of official work and other activities will be carried out from the location. “Honda will continue to have its R&D set-up, corporate office and spare parts operations at the Greater Noida location. Functions such as purchase, finance, service, marketing and sales, PR and HR would also continue from the location,” a source said.
Giving reasons for the company’s poor performance, industry analysts said Honda has “generally been late in responding to competition and changing market needs”, which has led to the brand facing a difficult period. The company, which had several top-management rejigs in the past, was initially late in introducing diesel engines and vehicles in India that had impacted its business severely.
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4 Comments on this Story
 | Ashish jha6 minutes ago I don't think it would be a smart option. surviving in Indian market is difficult but they need to come up with new innovations just like others |
 | Arjun Karmakar9 minutes ago No doubt Honda Car's are one of the best car's we have in india. But in order to survive in this competitive market, one has to come up new products as well as competitive price tag. And it needs to improve it's after sales service, and be consumer friendly, and the parts are not easily available and the price is too high compared to other cars. |
| prafulla more13 minutes ago it's difficult to survive in the Indian market without having presence in the small car segment which gives you volume to survive in the stiff competition. |