Honda Motor's component exports from India to its Asian facilities is set to grow 10 times to Rs 112 crore this fiscal from last year. This is part of a strategy to develop its domestic operations as a major parts exports hub for the region, even as it prepares for higher volume sales on the back of its new small car Brio.
In 2011-12, to Japanese carmaker will export engine parts for the City sedan and Jazz hatch to Indonesia, Malaysia, apart from kits comprising of Brio engine abe tranmission parts to Thailand. Parts exports in 2010-11 stood at Rs 11.3 crore.
"Quality and cost-competitiveness is high in India. The main idea was to get away from the exchange rate problem. Derisking (from concentrating production in Japan) is a spinoff benefit," said Mr Jnaneswar Sen, Senior Vice President, Sales and Marketing, Honda Siel Cars India.
The move will help Honda mitigate the negative impact of rising Yen, since many components were previously imported from Japan. It will also help create an alternate supply as a derisking strategy in case production is impacted in Japan like this year after the tsunami in March.
Mr Sen further said that by November, production of the Jazz premium hatch is expected to be doubled at its Greater Noida factory in order to reduce the waiting period of four months. Around 600-700 units of the Jazz is being made right now every month. Capacity at the plant is also being taken up to 1.2 lakhs a year from aroung 60,000.