Indonesia’s Minister of Industry Agus Gumiwang has said that Honda would relocate its plant from India to Indonesia. The message comes after his government met Honda officials during a visit to Japan in March.
In a virtual press conference, Gumiwang as quoted by CNN Indonesia said, “Production facilities in India will be moved to Indonesia and Honda is also committed to building a new model based on electricity”.
But Honda Cars India (HCIL) has denied that its parent company was moving a factory to Indonesia.
“As per a news report by CNN Indonesia dated March 12, 2021, which was also carried by a few other media in Asia region, it was reported that Honda is set to relocate its production facility from India to Indonesia which is not true. We would like to clarify that Honda has no such plans to relocate any production facility from India to Indonesia. To put things in correct perspective, we are exporting certain used machines from our Tapukara plant to Indonesia for their localization enhancement initiatives”, the Honda statement said.
HCIL has two plants in India, one of which (Greater Noida, Uttar Pradesh) was shut down in December 2020 as part of a restructuring effort that also saw the phasing out of two models from India, Civic and CR-V. HCIL’s other plant is in Rajasthan.
Honda was forced to keep the Greater Noida plant operational as it was the exclusive plant that made the Civic and CR-V. All its other models – Amaze, City, WR-V, and Jazz – moved to the new and technologically advanced Tapukara plant in Rajasthan.
Even though the vehicle manufacturing activities have ceased at Greater Noida, Honda does preventive maintenance at the plant which means that the plant will remain in an ideal shape, ready for a restart rather than a total lockout.
The absence of an SUV in the line-up has cost Honda dearly as one-third of India’s passenger vehicle (PV) space is now dominated by SUVs while more than half is made up of sub Rs 7 lakh hatchbacks, another segment that does not have the presence of the Japanese heavyweight.
Honda closed FY21 with a market share of just 3 percent in the domestic PV market. The company clocked sales of 82,074 units, a fall of 20 percent compared to 101,955 units sold FY20, as per data shared by the Society of Indian Automobile Manufacturers.
To be sure, Honda’s Indonesia sales were very close to India’s total last year. The Indonesian subsidiary closed in 2020 with sales of 79,451 units. This subsidiary also manages sales of 12 models in that country which is more than twice compared to India. New Brio, Civic hatchback, Odyssey, and Accord are some of the models sold in Indonesia but not seen in India.