Owing to the ongoing credit crisis and falling sales in the Indian market, Honda Siel Cars India Limited has put all plans on hold for its upcoming plant in Tapukara in Rajasthan. It has also paused all its plans to hire any new employees or put the assembly plant in operation. The rising yen and dollar have further added to the problems of the company. HSCI intends to set up Rs. 1000 crore plant in India but has currently put it on hold. “We had earlier planned the new plant to start by this year, but are not able to,” said Tatsuya Natsume, director, marketing, HSCI.
Honda has also priced its latest model Jazz with a higher price label. Investments in India have slowed down since December and the company will start new investments after the automotive market shows signs of recovery. “We do now know when the next Rs 400 crore (required for the plant to go on stream) will come,” Natsume said. This was the first time that there were any indications of uncertainty on behalf of the company. “We have a target that the market should reach two million units of cars before we pour in more investments in India,” he said. Honda also aims to brings its another small car in India by 2011.
