All is not well for the foreign auto makers who set the shop in India. After the news of Ford deciding to leave the country, Honda’s news of having incurred loss is another shock.
As per the returns filed with on the Ministry of Corporate affaires, Honda Car India has posted net loss of Rs. 1588 crores for current financial year 2020-21 which is slightly less than net loss of Rs. 1680 crores registerd in previous financial year. This is the third time that the japanese automibile giant posts loss for it’s indian operations. In FY 2017 the company posted loss of Rs. 2272 crores.
The major reasons attributed to this loss are fall in the sales due to pandemic, cost of employee separation and accelrated depreceiation charges.
Honda’s revenue fell by 11% to Rs. 9624 crores in 2020-21.Company spent Rs.463 crores on voluntary separation scheme offered to it’s Greater Noida plant employees which is now shut. Accelerated depreciation is Rs. 587 crores.