Honda to serve South Asia, South Africa from Indian plants.

NEW DELHI: Japanese automaker Honda Siel Cars plans to make India its South Asia manufacturing hub. It will also export locally made premium cars to Africa and other overseas markets.

Honda operates plants across the world and prefers local production in every major market, but is now planning to ship the flagship City sedan and other cars to South Africa. Already, a host of Indian company, such as Toyota Kirloskar Motors, Maruti Suzuki, Tata Motors, Mahindra and Mahindra, export vehicles to South Africa, one of the largest overseas market for locally made right-hand driven cars, trucks and buses.

Senior Honda executive said they are looking at various options and want to make India another manufacturing hub with the intention to use the spare capacity and utilize India's cost competitiveness. Its local manufacturing operations are expected to emerge as an alternative to Thailand, which currently feeds City and other cars to Africa and other markets. The company is drawing up plans to move cars from its Greater Noida plant in the next few months.

"We keep exploring new markets for growth opportunities. We currently export some models to the neighboring markets like Nepal, Sri Lanka and Bangladesh. However, we do not have anything specific to share at this moment," a company spokeswomen said.

HSCI is currently a fringe player in India's export market where over 5-lakh cars are shipped every year. While Hyundai, Maruti Suzuki and Nissan Motors lead the pack, Honda just sells around 100 City and other smaller models to neighbouring Nepal, Bangladesh, Bhutan and Sri Lanka. Now, with expanded portfolio, which includes Brio compact car, it aims to tap other markets and increase presence beyond India.

Sources in the company say that apart from City, the new Brio sedan that is expected to hit the market in next few months would supplement exports in a big way. "The new sedan would ideally be customized for the Indian market, but gradually also become a major part of the export strategy," said a senior Honda executive, preferring not to go on record.

"Honda already has huge capacity to make cars in India. This overcapacity has riding issues of piled up inventory, which can surely be addressed through exports. Honda is producing more than it can sell in the domestic market and exports would be a welcome step as it attempts to turnaround the India operations," says Deepesh Rathore MD-India IHS Global Insight, a multinational consultancy.

Source : economictimes.indiatimes.com