Honda stops work on 2nd plant in India

Written by Agencies | New Delhi | Updated: Feb 27 2009, 20:18pm hrs
Japanese car giant Honda has indefinitely put on hold opening of its Rs 1,000-crore second plant in India due to slowdown in the auto market.

The company has also terminated the service of about 1,000 temporary workers as it had cut India output by 50 per cent from the beginning of this year.

"We have not fixed any timeline for opening the second plant... It has been put on hold indefinitely," Honda Siel Cars India (HSCI) President and CEO Masahiro Takedagawa said in New Delhi.

"Our Greater Noida facility has a production capacity of one lakh unit, but this fiscal we expect to sell only about 55,000 units. After utilising the full capacity of this plant, we will start the second plant," he added.

The company, which is present in India through a joint venture with the Siel Group, has cut its production to 200 cars a day in a single shift since the beginning of this year from earlier the capacity of 400 units a day in two shifts.

"As we cut our production by half, so we have not renewed the contract of our temporary workers since August last year, but we have not let go our permanent staff," Takedagawa said.

The company has so far terminated the service of about 1,000 temporary workers, he added.