BL reported that Honda Siel, which launched the face lifted City sedan said that it is now trying to increase local sourcing of raw materials such as steel, apart from manufactured components.

Higher domestic sourcing is helping it price its models more competitively in the domestic market, while “de-risking” itself from an appreciating Yen (versus Rupee) and the erratic supply of components from Japan and Thailand.

Mr Jnaneswar Sen senior vice president sales and marketing at Honda Siel Cars India said that “We're increasing pure localization from India apart from components, this refers to raw materials. This has just started and is reflecting in our new pricing strategy on the cars.”

The New City, expanded to five main variants from three, has seen a second lowering of its entry price after June this year (INR 66,000 cut). With deliveries only from January, the current range now starts INR 50,000 lower at INR 0.699 million going up to INR 1.022 million. Similarly, prices for the Jazz premium hatch were also dropped by INR 0.16 million in August this year, leading to a significant increase in demand.

Honda expects output at its Greater Noida plant to come back to maximum levels by February to March this year, through alternate component supply from China and Japan.

This will help it meet the order backlog and reduce the waiting period of around four months both for the recently launched Brio small car and Jazz hatchback. The plant has been operating at about 20 per cent of the 10,000 unit monthly capacity in November due to a shortage of key components.

(Sourced from BL)