Honda Motorcycle to resume work in a phased manner post lockdown relaxation

Indian two-wheeler manufacturer Honda Motorcycle and Scooter India (HMSI) is getting ready to resume manufacturing operations in two phases after lockdown guidelines have been eased in parts of the country. HMSI has four manufacturing plants in India.

In a statement issued on Thursday by the two-wheeler manufacturer, HMSI said that it will resume production at these facilities in two separate phases. It also said that its facility in Narsapura, Karnataka, its biggest in India, will resume work starting May 25. Work in the other three plants will resume from first week of June. Overall, the company hopes to produce 64 lakh units per annum after restarting these facilities.

The HMSI statement read, "With a 360-degree outlook of balancing the forward and backend linkages across its ecosystem and the evolving market demand, the company has aligned its production plans."

"Honda is taking a calibrated approach across its entire ecosystem ensuring synergy for stable and efficient operations," the statement said.

HMSI also said that around most of its supplier plants have received the necessary approvals to resume their operations and are in advanced stages of resuming production. Hero Motorcycle has more than 300 supplier plants helping with key parts to produce its bikes and scooters.

Besides supplier plants, the company has also managed to reopen 60 per cent of its dealerships across the country. HMSI said that sales and services of its bikes and scooters have started at these dealerships. Last week, the company said it had retailed over 21,000 two-wheelers since resuming operations. Besides, nearly 2.5 lakh customers have got their two-wheelers serviced at the company's dealerships and authorised service outlets across the country.

However, demand of new vehicles have dropped significantly. The company hopes to gain momentum as demands pick up after lockdown is eased further.

The company said, "Hence, strategically aligning supply chain with market demand and available BS 4 inventory across its network, the company is set to resume production from its four factories in a staggered manner from May 25."

In order to ensure the business continuity of its dealer partners, HMSI had announced numerous support measures and incentives to reinforce its dealers amid the ongoing coronavirus crisis. HMSI has over 6,000 strong sales and service outlets across the country, including more than 1,000 dealerships.

HMSI said that all the unsold BS 4 inventory will be bought-back from its dealerships 'majorly in the Delhi NCR region'. Moreover, HMSI also announced that it is ready to bear the entire interest cost of BS 6 inventory (Physical as well as Transit) with the dealers for the 21-day lockdown.

HMSI had reported zero domestic sales in April, but managed to close the month with limited exports of 2,630 two-wheelers.