Honda Motors India Ltd has said the launch of its new small car Jazz will be in June as scheduled, while its plans to bring in a new version of the popular Accord are also on track, even as it plans to continue production cuts and may raise prices across models.
''Our product is our weapon...therefore we plan to launch it on its sheduled time,'' Honda Motors India Ltd president and chief executive officer Masahiro Takedagawa told reporters in New Delhi over the week end.
Trial production of the Jazz had already started, he added.
The company will continue to cut its India output by over 45 per cent for the next six months in order to prevent inventory build-up amid the slowdown in the domestic car market.
"We have already adjusted our productions. Today our inventory level for India is quite appropriate - two weeks for our own hand and two weeks on dealers' side. Probably for the next six months, single shift operations will continue," Takedagawa said.
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 the capacity of producing 380 units a day in two shifts, he added.
The company has also postponed by two years the completion of its second factory in Tapukara, Rajasthan but maintained that it is not mulling immediate price hikes across its models but is monitoring the situation.
''Devaluation of the rupee is impacting our business because 20-25 per cent of our components are imported from Japan and Thailand. We need to adjust this cost impact,'' Takedagawa said, president and chief executive of Honda Siel Cars India Ltd, said late on Saturday evening at a company awards function.
Honda Siel is working out the price increase for various models, but customers who have already ordered the new model of the Honda City will be protected. Launched in November, the City, which has sold 12,233 units, has been Honda's mainstay in the slowdown.
In the Indian market consumer confidence has come back slightly, Takedagawa added. Still, the company has seen sales of its models, other than the City, decline sharply. Its total sales in January fell by one-fourth, to 5,773 units when compared with the same month last year.
Takedagawa sees the downturn lasting for another six months. He points out that his firm caters to buyers in the premium segment, where the impact of an economic slowdown is tempered. Even so, ''customers are concerned with global economy so they have become naturally cautious'', he said.
Like its global counterparts, Toyota Motor Co and General Motors Corp, Honda has also been hit by slowing sales in India. But unlike them, it managed to close 2008 with a positive growth in unit sales due to the popularity of its motorcycles.