Honda Shutters Ayutthaya Plant, Cites 50% Shrunken Demands

As Chinese companies like BYD and GWM ramp up production and open up manufacturing hubs globally, it appears that one Japanese powerhouse is instead cutting back on production by shutting down one of its main overseas production plants.

The marque in question is Honda, and it soon joins the likes of Subaru and Suzuki to shutter one of its production plants in Thailand. As reported by Reuters, Honda’s Ayutthaya plant will cease operations by 2025, and the firm will instead focus its entire operation at its other remaining plant in Prachinburi.

The reason behind this is changing consumer demand in favour of electric vehicles (EVs). The Ayutthaya plant, which opened in 1996, will move its machinery to the newer Prachinburi factory inorder to streamline production and better coordinate manufacturing and sales in the Thai market.

Honda's combined production at these factories has decreased from 228,000 vehicles in 2019 to fewer than 150,000 per year during the last four years. During this time, annual sales in Thailand remained below 100,000 vehicles.

Honda will reportedly continue exporting vehicles from Thailand to other Southeast Asian markets such as Indonesia and the Philippines. Additionally, the Prachinburi factory will be retooled to prioritise hybrid car production, indicating a transition away from pure internal combustion engines (ICE).

As mentioned earlier, BYD had also recently opened its first Southeast Asian factory in Thailand with an investment worth US$490 million (RM2.3 billion). This new facility will have the capacity to produce 150,000 vehicles annually and will create 10,000 jobs.

Source: REUTERS