Honda Motorcycles offers voluntary retirement to employees as to ‘maintain its existence’

Honda Motorcycles and Scooters India (HMSI), the country’s second-largest manufacturer of two-wheelers with over 7000 employees across its four plants in India rolled out a letter on January 5 offering voluntary retirement to its employees in order to “maintain its existence” in a highly competitive market.

“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.

The scheme can either be availed by the employees who have completed 10 years of service or are over 40 years of age as of January 31, 2021. A senior manager or a vice president would receive over 7 million rupees, depending upon employees years of service. The company also added that it is offering an additional amount of Rs 5,00,000 to the first 400 people who will opt for retirement.

The sales of HMSI plunged 32% to 2.4 million units with overall sales of two-wheelers falling 25% during the first 8 months of the current fiscal year. The COVID-19 pandemic has worsened the situation for automobile companies in India which had already been hit by slowing demand since 2019.

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