Honda restructures operations in Thailand amid market shifts
Honda Motor has announced a significant restructuring of its manufacturing operations in Thailand. The Japanese automotive giant plans to cease vehicle production at its Ayutthaya province factory by 2025, shifting its focus to the more modern Prachinburi plant.
The Ayutthaya facility, which has been a foundation of Honda's production since 1996, will be repurposed to specialise in car parts manufacturing following the cessation of vehicle production.
The move, the company explains is aimed at addressing the disparity between Honda's production capacity and actual sales in Thailand. Over the past four years, production numbers have plummeted from 228,000 vehicles in 2019 to less than 150,000 annually, while sales have not exceeded 100,000 units per year during the same period.
By consolidating vehicle production at the Prachinburi plant, inaugurated in 2016, Honda will realign its manufacturing output with market demand and improve overall operational efficiency.
Honda's strategy also involves exporting vehicles from Thailand to other Southeast Asian markets, such as Indonesia and the Philippines, to mitigate the domestic shortfall in sales.
This restructuring is part of a broader trend among Japanese automakers who are struggling with challenges in key Asian markets, particularly in China, where local brands are gaining ground with competitively priced EVs and hybrids equipped with advanced software features.
However, the Federation of Thai Industries (FTI) holds the view that the transition of Honda Automobile's production facilities from Ayutthaya to Prachinburi is not a consequence of the declining sales figures in Thailand.
“Honda is a well-established Japanese brand in Thailand that will not be easily affected by sales. The restructuring of production facilities is likely a bid to adapt to the changing production technology, especially in electric and hybrid vehicles. Almost every automaker has undergone internal and external restructuring, including those in the US and China,” Surapong Paisitpattanapong, vice president and spokesperson of the FTI's automotive industry club, said on Monday, July 8.
In a related development, Tan Chong Subaru Automotive (Thailand) declared its intention to cease vehicle production in Thailand by the end of the year, following a five-year streak of financial losses.
