Honda Jazz bookings stopped due to production constraint

Honda India is facing an acute shortage of auto parts due to floods in Thailand and the natural calamity has led to stoppage in taking bookings for the company’s premium hatchback-Honda Jazz. It is reported that production is curbed because of the parts shortage. It was seen lately that small car Honda Jazz was gaining popularity owing to its price cut. New Jazz price went down to Rs 5.50 lakh (ex-showroom Delhi) for base variant. Honda imports critical components for the Jazz and the Brio from flood-hit Thailand. Earlier tsunami and now floods have declined the supply of some key parts like microchips from Japan.

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Not just Honda, but even other Japanese car makers that source parts from the Southeast Asian country are suffering from the shortage. Thailand is a hub for car makers, especially Japanese companies and India has an agreement with Thailand —known as the early harvest scheme in which components can be imported at lower duty rates. A spokesperson at Honda India said that the demand for Jazz has taken the company by surprise. Demand for the Jazz rose after prices were cut by as much as 23% in August. At least 500 units were sold in September against an average of 200 per month before the price cut. The initial production target for Jazz was much less. But now dealers can’t take more bookings as they have lesser number of cars allocated to them and it becomes irritating for the customers to wait as long as six months for a car. Honda is still assessing the impact of floods in Thailand where situation is very grim.

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However, Jnaneswar Sen, senior vice-president (sales and marketing) at Honda India consoled by saying that the situation is likely to improve by the end of November or early December. Given the demand, the company will start a second shift at its plant in Greater Noida next week to double production, Sen said. He added that Honda shall be able to produce 9,000-10,000 units from next month onwards with the second shift. Honda Motor Co. even postponed the launch of a new model of its Life minicar in Japan and halted car production in Malaysia due to problems in obtaining parts from Thailand. Sandeep Singh, deputy managing director at Toyota India said that there will be an impact on production—major or minor and that the company has kits in the pipeline till 14 November. The quantum of impact will be clear on 29th or 30th of this month. However unaffected R. Dayal, executive director (production engineering) at Maruti India said that the localization level at Maruti’s plant is so high that their dependence on Thailand is minimal.

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