Honda Stops Production of City. Brio Next? (Back to Normal)


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Article in the economic times...

http://economictimes.indiatimes.com...city-brio-to-be-next/articleshow/10850371.cms

Supply constraints due to floods in Thailand is wreaking havoc at Honda's Indian operations and has forced the company to shut down production of the City sedan and Brio compact. It has also cut back the output of the Jazz hatchback to a few hundred units. To tackle the problem of shortage of parts, Honda is making emergency arrangements to source components from locations in China and Japan to normalise output. Executive said the company will have to slash output by around 95% in December and only a few hundred units will be produced to keep the plant running and maintain manpower. The company's average production is about 6,000 units after the launch of the Brio.

Jnaneswar Sen, senior V-P at Honda Siel Cars India (HSCI), confirmed that output would be badly hit in December , adding that arrangements are being made to tap other areas for sourcing critical parts. "We are looking at China and Japan very keenly. We hope to firm up things soon and return to normalcy in the coming months, though nothing can be confirmed as of now," Sen said. Sources said while production of the City has already been stopped, the Brio will be discontinued from next month. Jazz will have a skeletal production, around 250 units, and a few hundred units of the Civic and Accord sedans will also be made. Honda has stopped taking new bookings for the Jazz at its dealerships due to the uncertainty and the model has a waiting list of over six months. The Brio too has been facing a long queue at dealerships.

"The situation is very bad and December could perhaps be one of the worst months for Honda in India," the sources said. The company has already started informing the customers about the delay in delivery due to the Thailand crisis. The Brio, which has sold 1,500 units so far, faces a backlog of 6,000 cars. On the Jazz, the pending bookings run up to 4,000 units. Dealer and vendor sources, however,said the situation on the City could improve by the middle of January and on the Jazz and Brio by mid-February. Honda gets a variety of electronic components and underbody parts from Thailand. The damaging floods came at a time when the company appeared to be coming out of tough times after a massive price correction on the Jazz and the City and launch of the Brio, its lowest-priced car in India.

Thailand was the first market where the Brio was manufactured and India followed later. A lot of the car's key parts are being sourced from Thailand with which India also has a trade agreement - known as the early harvest scheme - as a part of which components can be imported at lower duty rates. An official spokesperson said India is not the only market to face production halt due to disruption of supplies from Thailand. Honda's plants in Philippines, Indonesia and Vietnam are already shut due to supply crunch. Honda's current supply constraint comes after a similar problem earlier this year when Japan was hit by a tsunami and quake. Supply of components was also impacted then, leading to a cut in output.
 
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350Z

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Re: Honda stops production of City, Brio to be next

That’s a very unfortunate event for Honda. But the news has been just out that refreshed Honda City will be launching in Mid-December. Many of our members who have booked Jazz are already concerned due to the longer waiting periods. Hope that situation improves in 2012 and New Year brings some peace for the company.

Drive Safe,
350Z
 

TSIVipul

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Re: Honda stops production of City, Brio to be next

Well,read the news in today's Times of India's Business times section.
Its really very unfortunate to have such a news,but in the same section I have read that Honda is now searching for some new vendors from China and some other countries,India too,who can provide them with the parts they need for some time until the Thai problem comes to an end.
 
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Re: Honda stops production of City, Brio to be next

saw the pictures of floods it was horrible..hope Brio is covers it up for honda :) Brio is fun to drive, reliable, economical and fulfils the requirements of Indian customers
 
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Re: Honda stops production of City, Brio to be next

Bad new for Honda, now they have good bookings but they cant deliver on time. Honda has to start localization asap in india.
 
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Re: Honda stops production of City, Brio to be next

Very unfortunate. I absolutely love Jazz. Booked it soon after price cut in August but cancelled last week because now delivery shifted to April 2012
 
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Re: Honda stops production of City, Brio to be next

Really bad news for Honda. When they could have made a mark due to Maruti's crisis, nature took its toll on its plans. I hope they come out of it in 2012.
 
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Re: Honda stops production of City, Brio to be next

Why doesn't Honda manufacure completely in India itself ??
This Thailand stuff is just because Indian Govt signed some Free Trade Agreement (FTA) with Thailand, hence at almost no additional taxes, cos bring in good from Thailand in India.

Tata is a good example of how to deliver even in bad times. Car cos should learn something from them, including handling unions & giving time assurance, the Singur to Sanand case is the classic eg. for this.

Hyundai must be the most happiest now, Maruti has unions probs, Honda is stuck with floods & Tatas don't compete in petrol. i10 & i20 sales will definately get a push now.
 
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Re: Honda stops production of City, Brio to be next

I have read that Honda is now searching for some new vendors from China and some other countries,India too,who can provide them with the parts they need for some time until the Thai problem comes to an end.
It does'nt happen that way.

They cannot find new suppliers as a stop gap arrangement for next 2-3 months etc. In Automobile industry (and for that matter in any engineering industry) new supplier development is a long term process.

Automobile industry work on lean principles and the supply chain across levels (OEM, tier1, tier2, tier3 etc..) work on JIT (Just in Time) inventory or minimum possible inventory. So in times of crisis like this they are affected by stock outs and lost sales.
 
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Re: Honda stops production of City, Brio to be next

well honda was arrogantly flying in sky from so many days by lootings customers..they had to fall one day!!
 
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Re: Honda stops production of City, Brio to be next

It does'nt happen that way.

They cannot find new suppliers as a stop gap arrangement for next 2-3 months etc. In Automobile industry (and for that matter in any engineering industry) new supplier development is a long term process.

Automobile industry work on lean principles and the supply chain across levels (OEM, tier1, tier2, tier3 etc..) work on JIT (Just in Time) inventory or minimum possible inventory. So in times of crisis like this they are affected by stock outs and lost sales.
+1. It is now high time for Honda to consider India as a hub and start looking at India from a different angle.
 
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Re: Honda stops production of City, Brio to be next

Based on the sources from various dealerships, the price reduction is majorly due to indigenous production of majority of the parts.
I guess Honda has already started to have India as a primary target for their cars looking at the aggressiveness of the Germans.

Hopefully the stocks should be cleared off before the so called "Facelift" (Read: no much change).
 
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Re: Honda Stops Production of City. Brio To Be Next!

It seems that Honda which is facing the shortage of various parts due to floods in Thailand is all set to return to normal production very soon, atleast in UK. Sources in UK honda have said that their factory at Swindon will reach normal production on 19th December with a capacity of 638 cars per day. This will allow mass production of new Civic.

Honda UK to resume full production - Autocar.co.uk

Hoping that same improvement in Honda's production is seen here too.
 

350Z

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Re: Honda Stops Production of City. Brio To Be Next!

Good news: Honda will now start sourcing spare parts of Brio from China and Japan in order to start the production again in Jan-2012. Presently, only Honda Jazz is being produced and that too in limited numbers.

Drive Safe,
350Z
 
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Re: Honda Stops Production of City. Brio To Be Next!

Good news:

According to the Honda Siel ,has managed to secure alternative supplies from Japan and China, which will enable Honda resume full-fledged production and cut the waiting period for its cars.

Jnaneswar Sen, senior VP sales -
Now that we have secured alternative sources of supplies, we hope deliver as many cars as possible to our waiting City, Jazz and Brio customers.

Honda aims to resume its production output to 9000 to 10,000 units per month by March, 2012.

Honda will increase its efforts in localization of parts to make itself immune from such natural calamities in future and global currency. fluctuations.

Currently, the company has bookings of 7500 Brios, 4000 Jazzs and 2000 Citys. The Brio and the new City are now facing waiting periods of 4 to 8 weeks while that of Jazz is about 3 to 6 months. The company’s main focus is on clearing the bookings as quickly as possible and giving a re-birth to the Brio.

IAB,MotorBeam
 
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