Honda cuts output by 45 percent

Japanese car major Honda is to cut its India output by over 45 percent over the next six months. The step is being taken to prevent inventory build-up amidst the ongoing slowdown in the domestic market. The company, however, said its planned launch of the Jazz hatchback in the Indian market is on schedule.

The company, which is present in India through a joint venture with the Siel Group, has earlier this year cut its production to 200 cars a day in a single shift from 380 units a day in two shifts.

At present Honda Siel has a state-of-the-art manufacturing unit in Greater Noida, Uttar Pradesh. The initial installed capacity of the plant was 30,000 cars per annum, which has now been enhanced to 1,00,000 units annually since February 2008. The carmaker's second manufacturing plant is in Tapukara, Rajasthan, spread over 600 acres, has an initial production capacity of 60,000 units per annum and will make the new Jazz hatchback model.

Also, it is believed that due to rising input costs and devaluation of the rupee in the international market, the carmaker is planning to increase the prices of its products.