Honda to reduce 50% – Japan continues hurting business

japan-tsunami

Date- April 26, 2011 | Place- Mumbai

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After coming as blow for the Chinese vehicle manufacturing industry, the Japan quake has hit the Indian manufacturing industry hard now, with Honda Motor’s Indian subsidiary declaring to reduce production of its car models in India 50 percent.

Declaring that Honda is “experiencing gaps in the supply chain due to the situation in Japan, resulting in production cuts”, Honda Senior Vice President Jnaneswar Sen tried to make amends to the Honda declaration later by adding that the company was making all possible efforts to restore normal production and that they plan to get back to normal production as soon as supplies normalize.

It is to be noted that earlier another Japanese automobile major Toyota had declared to reduce its production by 70 percent between April and June. Toyota and Honda Motor Company had, very recently, made production cuts at their assembly operations in Canada and the US because of the shortage of parts caused by Japan disaster.

On the other hand, in China vehicle plants Dongfeng Nissan and Dongfeng Honda have been affected to a large extent with its import of vehicle part from Japan facing a huge crisis. Though the two plants remain operational, their managements were concerned about production and that sales might be lower.

After electronic components, the late blow in automobile and manufacturing industries are expected to create big worries to the economy of the business world. With as many as 40% of world’s electronic components produced in Japan, business in several countries of the west including the USA has already taken a severe blow due to the damage and breakdown of huge number of Japanese factories. The blow in telecom component market is a big one too, with the global revenue of telecom component market currently estimated to be around 5.6 billion dollars and Japanese companies alone contribute to about 30% of it.

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