Honda Motor said on 9 July that it will stop vehicle production at its Ayutthaya province plant in Thailand by 2025 as the company plans to consolidate its Thai output to its Prachinburi province plant, Reuters reported.
Honda’s move underscores the increasingly difficult situation the company faces in Thailand as consumer demand for electric vehicles continues to grow and Chinese automakers are aggressively seeking to gain market share in the country.
A Honda spokeswoman said its Ayutthaya plant in Thailand, which first started production in 1996, will start producing auto parts after it stops making cars next year. According to the spokesman, Honda will consolidate its Thai car production into its Bajin Province plant, which started production in 2016. The Ayutthaya plant and the Pazinphu plant are the only two Honda Motor factories in Thailand.
Honda Motor said the two plants will produce a total of 228,000 units in 2019, after averaging less than 150,000 units annually for the following four years. Meanwhile, Honda Motor’s sales in Thailand have been less than 100,000 units in each of the past four years.
According to the spokesman, Honda Motor wants to eliminate the gap in vehicle production and sales that has emerged in Thailand.
In addition, the spokesman said that Honda has started exporting cars from Thailand, mainly to other Southeast Asian markets such as Indonesia and the Philippines. The spokesperson also added that Honda Motor currently has no plans to make new investments in Thailand.
In China, Honda and other Japanese rivals have been hit hard as consumers turn to affordable electric and plug-in hybrid cars with advanced software made by emerging Chinese brands.
In addition, Japanese automakers now risk losing market share in markets outside China, such as Southeast Asia, which are increasingly being dominated by emerging Chinese brands seeking to expand their vehicle exports and build factories overseas.
Last week, BYD officially opened a battery-powered car factory in Thailand, part of a boom in investment by Chinese electric carmakers in the country that has totalled more than $1.44 billion so far.