Honda Motor Co is offering voluntary retirement to a group of employees at its motorcycles and scooters unit in India amid slowing demand in the country following the Covid-19 pandemic, according to a company letter.
Honda Motorcycles and Scooters India (HMSI), the country’s second-largest manufacturer of two-wheelers, made the offer to “maintain its existence” in a competitive market, it said in a letter to its employees’ union dated January 5.
While automakers globally have been battered by the pandemic, companies in India have been hit by slowing demand since 2019.
“The Indian auto industry is going through an exceptionally challenging phase considering the prolonged demand slowdown and economic fallout from the coronavirus crisis,” HMSI said in the letter, which was reviewed by Reuters.
“In these uncertain times, we are aligning our production strategy for improved overall operational efficiency with the objective of long term business sustainability,” it said.
HMSI did not immediately respond to an email seeking comment.