Why we are doing 50% of our installed capacity – Honda

Despite the economic downturn in the country, Honda Manufacturing Western Africa Limited, a 100 per cent subsidiary of Honda Motor Co. Ltd, Japan, said it would continue to maintain its brand quality standard in churning out its motorcycle and vehicle products. Although its production output has come down from its installed capacity of 1000 units […]

Despite the economic downturn in the country, Honda Manufacturing Western Africa Limited, a 100 per cent subsidiary of Honda Motor Co. Ltd, Japan, said it would continue to maintain its brand quality standard in churning out its motorcycle and vehicle products.

Although its production output has come down from its installed capacity of 1000 units of vehicles per annum, the auto firm maintains that it will continue to uphold its quality standard which it has been known for since its establishment in Nigeria 44 years ago.

Speaking during a tour of its factory in Ota, Ogun State, managing director, HAWA, Takashi Nakajima, said among other operational difficulties that the company is currently experiencing challenges with foreign exchange.

He said the uncertainty of the auto policy is also a challenge, which is now under discussion, adding that the direction of the policy is not yet stable.

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Nakajima said as an Original Equipment Manufacturer (OEM), it needs some stimulation from the government for the market to increase.

For instance, he said: “90 per cent of the market is used cars. If we have some regulations around new cars, it will help to build confidence in our business.”

He said the company has an installed capacity of 1000 per year, which can be doubled with more patronage from customers and government.

“We have an installed capacity of 1000 per year and daily capacity to assemble 3 units per day. For now, we are doing 50 per cent of the three units, that is, we do 1.5 units per day because of low sales and some other challenges,” he said.

Also speaking, the company’s sales manager, Remi Adams, said based on data gathered by individual efforts, the company has 10 per cent market share of the industry.

He said the company is currently lacking patronage from the government which is an enabler of products produced locally.

“We are ready to supply the government. As the only OEM in Nigeria and only assembler in Ogun State, we expect some patronage from the state government though they have not shut their doors. Our sales have been more, to the corporates”.

“There is something about popularity acceptance. Government as enabler determines what citizens will do, which trickles down to what consumers buy.  As OEM, our quality is guaranteed and our relationship with every customer is the same. In the US, Toyota is there and Honda is there and Honda is doing well. We have enjoyed patronage and still expect more,” he said.

Speaking on the level of local professionals working in the factory, Adams said the ratio is 99 per cent Nigerians to one foreigner. “You will see Nigerians everywhere. Once the experts are here to transfer technology, they go back.”

He said the company tried to source materials locally but most of the materials are not up to quality.

On expansion into gas-powered and electric-powered vehicles, he said: “In Nigeria, we are not yet considering electric vehicles because the standards and infrastructure are not in place with the technical know-how.”

HAWA is rather focused on quality and standards of product worldwide despite the difficult business environment, he added.