Honda cuts Thailand production and postpones new facility image

Honda Motor Co’s Thai division has decided to slow down production at its Ayutthaya manufacturing facility to just 60% of its capability, as political tensions in the country have impacted the internal demand.

In the Southeast Asian region Thailand has the biggest auto market, but the local automotive industry has been particularly susceptible to the faltering economy and political unrest – which saw army chief General Prayuth Chan-ocha staging a coup to take over the government.

“We have been worried about the unfavorable conditions since earlier this year, both economic and the political situation,” said Pitak Pruittisarikorn, executive vice president at Honda Automobile (Thailand) Co.

According to the Japanese automaker, the local division has also decided to postpone by six months to a ful year the ground breaking for a new $530 million manufacturing facility, which was scheduled for April 2015. Pruittisarikorn added the Ayutthaya plant has a yearly capacity of 300,000 cars and the production slowdown involves cutting the additional shifts to address unsold stock, while the new Prachinburi plant would have an installed capacity of 120,000 vehicles.

The Thai sales were down 33.2 % in April alone, according to the Federation of Thai Industries data, and Honda expects to miss its full year forecast of 120,000 units, with the overall market thought to fall below 1 million cars.

Via Reuters