Japanese auto majors Honda Motor Company (HMC) and Toyota Motor Corporation (TMC) are looking at developing their domestic operations as a major parts exports hub in the region post the introduction of India-specific models Brio and the Etios respectively in the country.
While Honda Cars India (HCI) is expecting revenues from component exports to increase to a whopping Rs 471 crore in this financial year largely on demand for parts for small car Brio in Thailand, Toyota will ship out transmissions for the Etios and the Liva to Brazil come January, 2013.
“Quality and competitiveness are high in India. We are exporting as many as 56 critical engine and body components for the Brio from our facility in Tapukara, Rajasthan. Besides, some components for the Jazz and City are also being shipped out of India”, said a senior executive at Honda Cars India.
The subsidiary’s revenues from component exports have gone up dramatically to a whopping Rs 229 crore in the last financial year post the introduction of the Brio in the Indian market in October last year as compared to the Rs 11.30 crore registered from the business venture in 2010-11.
“When the floods affected production in Thailand, we stepped up exports of components to our other Asian facilities from India. Revenues from component exports consequently more than doubled to Rs 229 crore over our initial estimates of Rs 112 crore last fiscal. Apart from de-risking business, exports helps in countering the impact of adverse forex fluctuations”, said a senior executive at Honda Cars India (HCI).
Overall Honda exports engine and critical components for the Brio, Jazz and City to Argentina and Brazil in South America, and to Indonesia, Malaysia, Japan, Philippines, Taiwan, Thailand and the United Kingdom in the Asian region. The company currently has a vendor base of 150 suppliers in India.
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Toyota, too which made the global debut of hatchback Liva and sedan Etios in India, will commence supply of transmissions from Toyota Kirloskar Auto Parts (TKAP) to its Brazilian affiliate early next year. Sandeep Singh, deputy managing director, Toyota Kirloskar Motor (TKM) said, “The Etios has opened opportunities for vendors in India. Transmission for the models will be supplied from India to Brazil where the Etios range has been introduced recently.”
TKAP has invested around Rs 500 crore to commission a gasoline engines’ assembly facility and a transmissions’ production unit in Karnataka. While the gasoline engine unit started operations in August this year, the transmissions production facility with an annual capacity of 240,000 units will be commissioned in January 2013.
TKAP already exports transmissions for multi-utility vehicles (MUV) Hilex and sports utility vehicle (SUV) Fortuner to manufacturing facilities in Thailand and Argentina.