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Honda seeks lifting of import curbs

Honda-Siel Cars India Limited has sought to be taken out of the purview of the government of India's automobile policy as the car-maker has achieved a local content level of 70 per cent.

Senior company officials, led by HSCIL President and Chief Executive Officer Teruo Fujisaki, recently met the director general of foreign trade and placed this request, DGFT sources said. Documents have also been submitted to substantiate its claim.

''We will now send our team to Honda-Siel's Surajpur unit to assess their claims. If they are found to have achieved the 70 per cent localisation level, they will automatically move out of the purview of the memorandum of understanding,'' the sources added.

As per the revised guidelines of the Indian automobile policy, the government has decided to maintain indigenisation levels at 50 per cent and 70 per cent for three and five years respectively but altered the formula for calculating the levels.

Hitherto, even 10 per cent import content in any component used to be calculated as imports. But now the government has decided that imports up to 50 per cent by vendors for making components would be considered as local content.

Besides, once the car company reaches the prescribed limit of indigenisation, it would move out of the purview of the MOU and is free to import and export components as well.

HSCI is now planning to launch its high-end luxury Sedan Accord, priced at Rs 1.75 million by the end of 1999. The company has dropped plans to produce the Accord in India and will import completely built units -- CBU -- of the car and market the vehicles in India.

DGFT sources pointed out that Honda-Siel would automatically move back into the purview of the MoU once CBU imports of the Accord commence.

''HSCI has to maintain the indigenisation level of 70 per cent at all times, else all the conditions of the policy would be applicable to the company,'' the sources claimed.

UNI

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