Honda Motorcycle and Scooter India (HMSI) has initiated a voluntary retirement scheme (VRS) for the company's permanent employees. The decision comes in the middle of challenging market conditions and a downturn in the Indian economy, although the automotive industry has seen somewhat of a bounceback after the challenges from the COVID-19 pandemic. The VRS will run from January 5 till January 23 this year and cover permanent employees, barring director-level officials. Permanent employees who have completed 10 years with the company as on January 31, 2021 or who are above 40 years of age can opt for the V ₹
In a statement, HMSI said that the Indian auto industry is going through an exceptionally challenging phase from the past three years "considering the prolonged demand slowdown and overall economic fallout from the COVID-19 pandemic."
"The VRS scheme announcement for our associates is a part of Honda's overall production realignment strategy across all 4 factories to improve our operational efficiency with the objective of ensuring long-term business sustainability," HMSI said in a press statement.
"As part of this strategy, the Voluntary Retirement Scheme (VRS) option for all eligible permanent associates. It gives a new opportunity to those associates who may wish to explore new dimensions in their life and empowers them with best among the industry financial and healthcare benefits, while helping the organisation improve its overall operational efficiency," the statement added.
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Under the VRS, Senior Managers, Vice-Presidents and permanent workmen can get a maximum amount of ₹ 72 lakh. Managers can get ₹ 67 lakh, Deputy Manager ( ₹ 48 lakh), Assistant Manager ( ₹ 36 lakh), Senior Executive ( ₹ 31 lakh), Executive ( ₹ 27 lakh) and Assistant Executive ( ₹ 15 lakh). The company is also offering ₹ 5 lakh extra for the first 400 employees who opt for the scheme.
In December 2020, HMSI reported domestic sales of 2,42,046 units, just a 5 per cent increase over the same month a year ago. Exports accounted for 20,981 units, with total December 2020 sales at 2,63,027 units. The October to December 2020 quarter stood out as the first quarter of the current financial year where Honda reported positive sales.