NEW DELHI, April 13: Honda Siel Cars India will not scale down its sales target of 20,000 cars for fiscal 1998-99 despite the recession in the mid-size segment in the country. N Kawamoto, president and CEO Honda Motor Co of Japan, said here on Monday that the Honda Siel's plant is flexible and would adjust to the demand of the Indian market.Due to the South East Asian currency crisis, Honda had to cut production in Thailand, Indonesia and Malaysia by over 75 per cent, though the market size in these countries went down by over 80 per cent.
Speaking at the formal inauguration of its plant at Greater Noida in Uttar Pradesh on Monday, he said that "India will emerge as a major player in the global economy". But the new government along with the state government and related agencies, must address the infrastructure problems with urgency so as to attract foreign investment. T Fujisaki, president and CEO of Honda Siel Cars India Ltd said that City, the first car to be introduced in the market in January, hascornered 25 per cent of the market and 40 per cent in certain areas with the existing six dealers. The company is planning to appoint 21 dealers in 17 cities by the end of this year. It would consider introduction of a new model only after achieving better volumes. The plant, set up on 150 acres of land, has an installed capacity of 30,000 cars per annum, which can be increased to 200,000 units per annum for manufacturing other models. He said, "Our target for this year is 20,000 cars but a lot depends on the budget. We hope that the new budget would help the economy grow.''
The City, which comes in a 1.3 litre and 1.5 litre version, has an indigenisation level of over 50 per cent now and this would go up to 70 per cent by the year 2001 said.
He said Honda was not planning to invest in press shop to make body parts in the country until the volumes became viable. This would be possible in two to three years at least, when 30,000 units of cars can be sold in the market. Asked when the company wouldcomplete investment of $50 million as stipulated by the automobile policy of the government, Fujisaki said $47 million has already been invested and the rest would be invested "on time''.The total investment in the project is around Rs 850 crore to be pumped in five to seven years, of which Rs 450 crore has already been invested.On the premium car market in the country, Fujisaki said the market was yet to become competitive.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
