The ‘unprecedented’ situation brought about by the coronavirus pandemic has forced Honda two wheelers to review each of its decisions aided by inputs coming from its ground teams.
Speaking exclusively to Moneycontrol, a senior executive of Honda Motorcycle and Scooter India (HMSI) - the second-largest two-wheeler manufacturer in the country, has said that cross-functional teams are meeting every day and providing reports that will decide which projects need to be continued with. The executive, however, cautioned that it was too early to finalise any suggestions.
Y S Guleria, director (sales and marketing), HMSI said, “There will be a lot many things that will need to be realigned and reorganised to deal with this unprecedented crisis. When such decisions can be finalised will depend on upon (when) the lockdown (will be lifted) or any economic package announced by the government. Definitely everything will be reviewed.”
HMSI recorded its second straight yearly fall in domestic sales during FY20. The manufacturer of Activa and Unicorn clocked a fall of 14.75 percent during last year to 4.7 million. In FY19, the company reported a fall of 4.4 percent to 5.52 million units. Despite the fall, HMSI managed to improve its market share to 27.02 percent in FY20 from 26.06 percent in FY19.
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With no certainty of demand getting back on track this year companies are forced to relook at mid to long term business decisions made prior to the lockdown including investment on new capacity creation or venturing into the new vehicle segment.
“All developments are being monitored very closely; cross-functional teams are meeting on a daily basis. We have R&D team working on new model development, we have dealer development and sales teams and after sales teams who are updating on a daily basis the situation on the ground. Based on that there is discussion about realigning and reviewing each and every plan. This could be about launch of new models, development of network infrastructure or even assessing the capacity utilization for the future” added Guleria.
To help its business partners tide over the situation HMSI announced a financial package of Rs 1,700 crore that was used to make advance payments of incentives and reimbursements to its dealers, suppliers and service providers.
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Honda also said that it would take back the unsold units of Bharat Stage IV (BS-IV) inventory lying with a few dealers in the Delhi-NCR region and also entirely bear the interest cost of BS-VI inventory (physical and transit). Maruti Suzuki and Honda Cars India have also declared financial aid packages.
When asked if the financial package is the final one, Guleria replied, “The situation is very dynamic and it is too early to say if this is the final help we are providing. And, it is not to say that we are creating another hope but all the company has to reassess its own business area. We have to continuously monitor with our dealers and vendors. The board members are meeting function heads on a daily basis. As and when some intervention is required from our side then definitely be reviewed and executed.”
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