The Japanese auto giant, Honda is facing a huge problem in terms of production and has currently suspended the production of its compact hatchback, the Brio due to lack of availability of parts. Some of the key components for the Brio and Jazz are manufactured and shipped from Thailand to India. Due to the recent floods in Thailand, the company’s production was badly hit. Honda sells the Brio in Thailand only apart from India and Honda personnel are now in talks with different alternative supplies based in china for the sourcing of the same components. The company has almost finalized its alternative sourcing arrangements and is likely to go into normal production by February or March. Although Honda has stopped production of the Brio temporarily, they haven’t stopped bookings for the model. The bookings for Jazz have been temporarily put on hold.
“We have been trying to source from alternative destinations like Japan and China parts that we now import from Thailand. The arrangement is almost done and the manufacturing and purchasing teams are putting finishing touches to the recovery plan. Right now we are not making Brio and only producing very small numbers of Jazz. We will start the ramp up of production by end-January first with the City,” Jnaneswar Sen, senior vice-president, Honda India, said.
Other Japanese OEMs like Toyota have also been hit by the floods and it is currently diverting parts produced to cater to the demand of other car markets to the Indian market. The Thailand floods were a big blow for Honda when the company was already struggling massive production problems due to the earthquake and tsunami that raked Japan earlier this year. Mr. Sen added that because of the natural disasters in Japan, the company had already cut production volumes by 50%. The Thai floods hit Honda Siel production so badly that it managed only 2,000-odd units of sales in November; production was actually a little lower than that. The company sold 31,699 units in the April-November period, down from 39,551 units sold in the same period last year. Till November, the company was able to manufacture only 1800 Brios while the bookings for the same model stood at about 7500. With the ramp-up in production after sourcing its components from china, the company hoped to clear the backlog.