Rumour: Honda could shut down Greater Noida unit

According to a media report, Honda could restructure its manufacturing operations in India by shutting down one of its units.

The report states that Honda could move production from Greater Noida to the Rajasthan plant as sales volumes have almost halved in the last 4 years.

The Greater Noida plant has an annual capacity of 1.2 lakh units. At present, it is said to be operating at almost 2,500 units / month or less than 20-30% of the total capacity. The cumulative production capacity is also expected to drop to 40%. It is believed that the Greater Noida unit could host an R&D hub and a small CKD assembly unit. The carmaker could also sell the land acquired for a third assembly plant in Gujarat.

Honda was expecting a strong growth when it planned investments in Gujarat and Rajasthan. However, in the past 5 years, the market has grown by just 4-5%. To make matters worse, sales have tanked in the first half of the current fiscal. Sales dropped 35% to 60,000 units in April-September, 2019.

Source