Honda Cars bets on components exports

Japanese automobile major Honda Cars India has seen a 164 per cent (almost three times) jump in component exports from India during the last financial year when compared to 2013-14.

Component exports saw a steady growth as the company focussed on using India as a low-cost manufacturer of quality components needed at Honda plants worldwide.

Jnaneswar Sen, senior vicepresident, marketing and sales, Honda Cars India, said that recently, the company started exporting the 1.6-litre diesel engine made here to Thailand. “We have been exporting transmissions and other engine parts from our Tapukara facility in Rajasthan to a host of global operations. It has been growing steadily.”

The firm exports forgings, transmissions and other engine components from India to countries such as Japan, Thailand, Malaysia and Indonesia, among others. From July, it also commenced exports of fully assembled diesel engines.

Exports have grown from ~443 crore in FY14 to ~737 crore in FY15, thereafter touching ~1,036 crore in FY16. In FY17, the company exported components worth ~1,140 crore, and the number is expected to see a huge boost in FY18.

The firm has two plants in the country— at Greater Noida and another at Tapukara. The firm’s combined capacity to produce cars is 300,000 units per annum (with some tweaking). During the first half of this year, the company has sold around 91,000 units in the domestic market and has exported 2,724 units during the same period.

Sen said, “We have idle capacity that can take care of our production requirement for the next two years.” It is also acquiring land in Vithalapur in Gujarat. A major portion of the land has been acquired, officials said. Honda Cars is looking at a 400-acre site near the Honda Motorcycle and Scooter India plant here.

This, however, is for the long term as the firm’s current production capacity is sufficient to take care of the immediate needs. Thus, the focus on making engine components. The engine plant utilisation at Tapukara is around 80 per cent or so, despite its sluggish sales in the domestic market. It can make 180,000 engines per year and is one of the largest manual transmission and diesel engine manufacturing facilities for Honda globally.

WE HAVE BEEN EXPORTING TRANSMISSIONS AND OTHER ENGINE PARTS FROM OUR TAPUKARA FACILITY IN RAJASTHAN TO A HOST OF GLOBAL OPERATIONS. IT HAS BEEN GROWING STEADILY” JNANESWAR SEN, Senior vice-president, marketing and sales, Honda Cars India