Honda to shift car production from UP to Rajasthan, a blow to state ranked 2nd in Ease of Doing Business
The development is being regarded as a severe blow to Uttar Pradesh that has gone all-out to attract foreign investment to its turf and effected a series of key policy changes.
NEW DELHI: Globally acclaimed Japanese car producer Honda has decided to shift its production from its 23-year old Greater Noida plant to Rajasthan-based plant in village Tapukara and shut its car production in Uttar Pradesh.
This plant has been operational here for the past two decades and produced cars like Honda City, CR-V, and Civic.
The development is also being regarded as a severe blow to Uttar Pradesh that has been going on all-out to attract foreign investment to its turf and effected a series of policy changes, and also scaled to the 2nd ranking in the ease of doing a business (EODB) chart in the country from its languishing position of 14th.
However, the state has been successful in having Korean majors like Samsung and LG as well as other OEM suppliers to set their basis there.
Though the company is yet to make an official announcement citing reasons behind this crucial decision, and the future course of action in Uttar Pradesh, the sources have revealed that Honda Cars India Ltd (HCIL) has been severely hit by stiff competition and a challenging business environment in India.
Nor there has been any statement issued from the government of Uttar Pradesh or its industry department. There prevails an uneasy calm in the state on this development.
According to the sources, HCIL management would limit its operations at the Greater Noida facility and utilize it as the company’s corporate head office, spare parts division, and research and development (R&D) centre.
It is also noteworthy that Greater Noida has in the past couple of years has emerged as the growing hub for the companies from South Korea including Samsung and LG, and many other ancillary units. Samsung has set its world’s biggest mobile phone factory in Greater Noida.
Honda India is a wholly-owned subsidiary of Japanese Honda Motor Co. and its plant was set up in Greater Noida in the year1997.
The decision to shuts its car production here was probably taken in the fag end of last year by the management as it had rolled out a voluntary retirement scheme (VRS) for its production workers and other officials in and around January this year.
