Honda postponed expansion plan in Rajasthan

The largest auto maker of Japan, Honda Motor Co. on Wednesday said that they decided to defer capacity expansion and assembly operations plans at its second Indian plant in Rajasthan besides cutting production at the existing facility at Greater Noida, near Delhi.

Honda Siel Cars India (HSCI) runs its operations in India as a joint of Honda Motor Co. and Siel Group. The HSCI said that due to the current economic slowdown they postponed capacity enhancement and assembly operations plans at its second manufacturing plant in Tapukara, Rajasthan. The current economic slowdown affected the automobile industry also and company faced the fall in sales in last month.

The company official said that capacity expansion is initially scheduled for the last quarter of 2009, which has been postponed due to the current economic slowdown but it would not impact the launch of premium hatchback, Jazz as it would be manufactured from the Greater Noida plant.

HSCI had planned to set up the second plant at Tapukara, Rajasthan with an initial capacity of 60,000 units, while it had expanded the capacity of Greater Noida plant to one 1,00,000 units annually. The company official said that the production of the Greater Noida plant would be reduced, without specifying quantum, due to the slow down in the Indian automobile industry and in the interest of maintaining lean operations.