Honda Cars India profitable for the first time in three years

Intensive restructuring of product portfolios, lean management and robust exports helped the Japanese brand to come out of red, as it now eyes breakeven at one lakh units, reports Ketan Thakkar

- Ketan Thakkar

After consolidating its manufacturing footprint A and rationalising workforce through a voluntary, da Cars India's balance sheet has returned to black for the first time in three years.

With the aim of making its India operations break even with a minimum volume of one lakh units a year, the company took a series of management restructuring exercises to downsize itself into a leaner organisation in FY22.

In its annual filing to the Ministry of Corporate Affairs sourced from Veratech Intelligence, the maker of popular City and Amaze sedans reported that it posted a net profit of Rs 230 crore in the previous fiscal - after two consecutive years of losses. The company had last posted a profit of Rs 1,141 crore in FY19.

Led by over a 200 percent increase in exports of vehicles and 60 percent rise in parts exports, Honda Cars India posted more than a 20 percent rise in total revenues in FY22 to Rs 12,442 crore, despite domestic volumes just growing by over four percent.

Reviewing its operation, the directors report stated, "the fiscal year 2021-22 was a mixed bag for the industry. Every quarter was punctuated with multiple challenges-from the pandemic to paucity of chip shortage and hike in raw material pricing. The industry, however, showed resilience and succeeded in restoring positivity in the market."