Honda to close Thai plant as Chinese competition mounts – remaining factory to be retooled for hybrids

Honda to close Thai plant as Chinese competition mounts – remaining factory to be retooled for hybrids

It’s not just Subaru that has been forced to cease vehicle production in Southeast Asia – Honda has also reportedly made its decision to close one of its two factories in Thailand, according to Nikkei Asia.

The Japanese carmaker is set to shutter its Ayutthaya plant by 2025, as it continues to cede market share to Chinese brands as consumer demand for electric vehicles grows. The move will see the company consolidate its production at its remaining Prachinburi plant and close the gap between production and sales, said a spokesperson, with the Ayutthaya facility being repurposed for making car parts.

Tougher market conditions have seen Honda’s combined production in Thailand fall below 150,000 units per annum in the last four years, from a high of 228,000 units in 2019. Yearly sales, meanwhile, have stayed below the 100,000 mark in the last four years.

Honda to close Thai plant as Chinese competition mounts – remaining factory to be retooled for hybrids

Honda is already building its new e:N1 EV at its remaining plant in Prachinburi

Another spokesperson said that additional investments into the Prachinburi plant will facilitate a shift to hybrid vehicles as a priority over internal combustion engines. Honda has already started building electric vehicles there, churning out the HR-V-based e:N1 on a dedicated line.

The publication stated that Japanese carmakers like Honda and rival Nissan, already hit hard by stiff competition in China, are at risk of losing customers outside of the Middle Kingdom, including in ASEAN. This comes as Chinese carmakers are aggressively expanding their reach in export markets and building factories overseas.

One of the biggest, BYD, has already opened an EV plant in Rayong last week, with an annual capacity of 150,000 vehicles. The move is part of an investment worth more than US$1.44 billion (RM6.8 billion) from Chinese EV makers that are establishing factories in the country, Nikkei Asia reported.

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