Honda Motor Co. on Monday is set to move on with its plan of turning India into a major export hub for automobile components towards its global operations, This Japanese car manufacturing giant [ans to do this by incorporating its robust supply chain in the activity.
While the company’s turnover from the export of components in 2013-14 was around Rs 420 crore, it exported components of over Rs 720 crore in 2014-15. This year, Honda is looking at increasing the same by over 50 per cent to Rs 1,100 crore, adding US, China and Canada, among others, as potential component markets.
“Currently, we export a lot of components towards our operations in Japan, South Africa, Europe and South America. For instance, we ship engine components (such as forgings and transmissions) from our facility at Tapukara in Rajasthan,” Honda Cars India (HCIL) Senior Vice President (Marketing and Sales) Jnaneswar Sen told Deccan Herald.
Sen launched the company’s latest offering — the third generation ‘Jazz’ — in Bengaluru. The global Jazz, integrating a slew of advanced features, and priced between Rs 5,40,900 and Rs 8,75,500 across petrol and diesel variants (ex-showroom Bengaluru), boasts of around 95 per cent localisation, making it the company’s most localised car.
Pushes localisation
HCIL’s strategy of localisation has gone through immense research and development (R&D) integrating its 240-strong supplier base. “We have been conducting R&D since 2009, with focus on localisation in order to de-risk ourselves against the exchange movement. Our idea is to incorporate more localised sourcing into our cars, and offer products of global quality at competitive prices,” Sen said.It must be noted that the 2009 model of Jazz had a localisation of 72 per cent, which has considerably gone up today. Besides, Honda’s other models such as the Brio, City, Accord and the Mobilio, each have over 90 per cent localisation.
As part of its product push, Honda is eyeing all segments of the market. “The Indian market is evolving and has fragmented into various segments and sub-segments. We are studying all of them as we plan to introduce new cars,” he said. He added that the company is rolling out a new model of the premium sedan ‘Accord’, in 2016.
The company is also looking at exporting the Jazz to several South Asian markets, having already exported around 1,750 cars to South Africa since February this year.
HCIL sold 1.89 lakh cars in 2014-15, growing at 41 per cent, while its two facilities at Tapukara and Greater Noida, work at full annual capacity of 1.2 lakh units each (totalling 2.4 lakh units). To cater to the growing demand, HCIL has invested an additional Rs 380 crore at its Tapukara facility, to add an extra volume of 60,000 units, in an effort to take the total India capacity to 3 lakh units.
“We also plan to expand our dealership reach from 243 dealerships in 160 towns and cities, and to 300 dealerships across 200 towns and cities by March 2016,” Sen said.
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