Honda is planning to include India in its global supply chain of engine components. It is not planning to make India its manufacturing hub for its small cars like Hyundai or Maruti Suzuki have done. On the contrary, it will use its upcoming Rajasthan manufacturing unit as an exports base for its engine components.
Honda Siel Cars India Ltd. is investing Rs. 1000 crores in Tapukara Industrial Area in Rajasthan. It is setting up a manufacturing unit in 60 acres of area that will have an annual capacity of 60000 units in its initial phase. It has similarly set up production units in other ASEAN countries that serve as supply chain units and sourcing base for critical engine components.
Honda trails Toyota at the second position for the most profit making Car Company in the world. It will complete its plant in 2009 and will reap benefits from the Free Trade Agreement between ASEAN countries. There are special duty benefits given to few engine components between India and Thailand where Honda already has its similar plant.
“Our plan is to integrate HSCI into Honda’s pan-Asia supply chain network with our new plant becoming the export base for certain key engine components including crankshafts. These exports will happen to ASEAN countries, which also make other parts,” said Masahiro Takedagawa, president and CEO, HSCI.
