The 45-day-long labour unrest at the Honda Motorcycle & Scooter India factory at Manesar in Haryana has doubled the waiting period for its scooters to two months and given market share on a platter to rivals.
“There are people who must have a new vehicle for the Diwali season. So there’s a palpable spillover in the increased demand for our models,” said a Bajaj Auto executive. Added Suzuki Motorcycles India Vice-president (sales and marketing) Atul Gupta: “We are confident of touching 31,000 units both for September and October, which represents a 40 per cent growth against similar period last year.”
A Honda executive confirmed the drop in production. “Due to the 50 per cent dip in daily output at our factory, the waiting period for our scooters now stands at around two months. But the customers who walk into our showrooms have agreed to wait to get delivery of their two wheelers.”
Honda has lost production of around 55,000 two-wheelers because of the workers’ agitation so far. The company attributed the unrest to disagreement in long-term wage settlement with a section of the temporary workers. According to Honda executives, these workers have prevented other workers from operating a new vehicle assembly line which would have helped the company to meet the current festival demand. Honda, like most other two-wheeler companies, derives about 10 per cent of its annual sales in the festive months of September and October. Honda executives said they are close to a settlement with the union.
Honda Motorcycle and Scooters India Employees Union President Ashok Yadav, however, denied that the workers were on strike and said the decline in production was due to non-availability of components as some supplier factories were on strike.
“The production at our factory is low but it is not that we are on strike or we are going slow; the ongoing labour strike in some ancillary companies has led to a drop in component supplies,” the Press Trust of India quoted Yadav as saying. The Honda executive added that the company has a long-term plan to move out of Manesar if the confrontation which has been simmering for the last three years is not resolved.
“All our investments have been made in Manesar. It’s too early to comment to where we would shift if the need arises,” he said. The company employs around 1,900 employees in the temporary cadre and an equal number as permanent employees.