As per news reports, Honda Cars India Ltd (HCIL) has decided to stop the production at its Greater Noida plant in Uttar Pradesh.

HCIL is a wholly-owned subsidiary of Japanese Honda Motor Co. It had set up the the manufacturing facility at Greater Noida in 1997.

As per the Industry sources, the NOIDA-based unit will, however, will continue to be the Honda's corporate head office, research and development (R&D) centre, and spare parts division among other functions.

However, Honda has declined to give a statement on this matter.

It will now rely completely on its Tapukara manufacturing facility in Rajasthan to produce its complete range of car models including Honda City, Honda Jazz, Honda Amaze, Honda CR-V, and more in the country. The facility is capable of manufacturing up to 1.8 lakh vehicles per annum. It also produces engines that are exported to other parts of the world.

HCIL used to manufacture models like Civic, CR-V, and City from the Greater Noida manufacturing facility. It had the production capacity of one lakh vehicle per year.

At the sales front, Honda has registered the sales of 9,990 in India in the month of November 2020. It is 55 percent more than that sales of November 2019.

Why Honda has closed manufacturing unit at Greater Noida?

As per auto experts, Honda has always been a slow respondent to ever evolving consumer demands and market dynamics. It was also very late at introducing diesel engine in its lineup of car. Its best selling models like City and Amaze saw in dip in sales due to the absence of diesel engine.

It was also late in introducing features features like Apple CarPlay, Android Auto, and other smart features. On top of that, with current difficult market conditions, sales have taken a hit for Honda.

In such a scenario, it makes sense to manufacture from a single facility to optimize costs and bring-in more efficiency into the system.