Increased local production is the only profitable option given the strong Japanese Yen.
Honda Automobile in Thailand today restarted automobile production in the Rojana Industrial Park, Ayutthaya, for the first time since 4 October 2011, when the plant was closed because of the flooding.
It took since last November to clean, inspect, repair and replace plant facilities and manufacturing equipment damaged by the flood. In the interim, Honda supplied automobiles from Japan to countries in the Asia Oceania Region that had production disrupted because of severe flooding – the worst in decades.
During the Q3 of the Japanese fiscal year ending 31 December 2011, Honda profits dropped 33%, largely because of production disruptions.
As of today, all production plants have resumed production and are expected to be running normally in April. For all other Honda production operations outside of the Asia Oceania Region, the impact of the flooding in Thailand was fixed by the end of last year.
Car sales in Southeast Asia are expected to rise this year above the 2.2 million posted in 2011. Some projections have them increasing to 2.7 million vehicles annually by 2015.
Honda’s automobile manufacturing and sales joint venture in Indonesia announced earlier this month that plans to build a new automobile plant with annual production capacity of 120,000 units. The plant will be located at the existing P.T. Honda Prospect Motor plant at Karawang Industrial Park in a suburb of Jakarta. Combined with the current capacity of 60,000 units for Jazz, Freed and CR-V models, HPM’s total annual production capacity will be 180,000 units.
As part of the move by Japanese automakers away from the strong Yen and the problems its poses for exports out of Japan, HPM will increase local product planning and engineering, as well as up local content to approximately 80% from the current level of 50%.
Indonesian sales could surpass 900,000 vehicles this year, thereby making the archipelago the largest and fastest-growing market among the ASEAN trading block, according to auto analyst Michael Dunne who lives in Jakarta.
In January of 2012, Honda produced almost 317,000 vehicles, with North America and the U.S. posting all-time monthly records of 150,000 and 108,000 respectively. (See Honda Sets January North America, U.S. Production Records)
