Bangkok--7 Feb--Aziam Burson-Marsteller
- Investing over 17.15 billion Baht to build the new Prachinburi plant with a production capacity of 120,000 units per year
- Investing another 2.91 billion Baht to expand the production capacity at its Ayutthaya plant to 300,000 units per year in 2014
- Honda’s combined production capacity for the two plants in Thailand to reach 420,000 units per year in 2015
Honda Automobile (Thailand) Co., Ltd., the manufacturer and distributor of Honda cars in Thailand, announced it will invest 17.15 billion baht to build a second assembly & engine plant in Prachinburi province. Scheduled to begin operating in 2015, the new plant will have a production capacity of 120,000 units per year. It is scheduled to begin construction in July 2013 and start operating in 2015. Honda is also making an additional investment to increase the annual production capacity of its Ayutthaya assembly plant to 300,000 units by early 2014. With the combined capacity of the two plants, Honda’s total annual production capacity for vehicles in Thailand will increase to 420,000 units per year in 2015.
Mr. Hiroshi Kobayashi, President & CEO of Asian Honda Motor Co., Ltd., and President of Honda Automobile (Thailand) Co., Ltd., said that, at this time last year, Honda was facing tremendous challenges. “The great flood of 2011 had closed down the Ayutthaya assembly plant. With the enormous effort of the Honda team and our supporters, it was up and running by the end of March, 2012. We aggressively moved into the market with the launch of 10 models within only nine months of 2012, including the highly successful Brio Amaze, leading to a new sales record for the year. This has proven that Honda’s commitment to Thailand never wavered — and Honda actually emerged from the crisis stronger,” he said.
“Honda is committed to growing our business along with the prosperity of Thai society, producing vehicles and parts for the ASEAN and Oceania markets as well as other markets around the world. To ensure that Honda’s Thai production capabilities are ready to meet future increases in demand for automobiles based on the rising income levels of people in Thailand, and meet expected global demand for Honda’s small and fuel-efficient vehicles, Honda will invest 17.15 billion baht to build a new assembly & engine plant in Prachinburi province. We will also invest in increasing the capacity of our existing Ayutthaya assembly plant,” added Mr. Kobayashi.
Under its next mid-term business plan, which runs through the fiscal year ending in March, 2017, Honda aims to expand the joy by bringing in more than 39 million new customers around the world. This will be a combination of 25 million motorcycle customers, 8 million power products customers, and 6 million automobile customers. Honda aims to provide good products to customers with speed, affordability, and low CO2 emissions.
To enable this ambitious growth, Honda will implement global operational changes that will allow the company to offer the best vehicle specifications at competitive costs. This includes three key initiatives, which are: 1) Concurrent product development in all six regions of the world, in which new models will launch in all regions within a shorter period of time, enabling Honda to reach higher levels of global production volume very quickly. This will significantly reduce the production cost; 2) Adopting locally-optimized design drawings, which will also maximize the use of raw materials and local production systems to serve customer needs in each area quickly and efficiently; and 3) Improving production efficiency.
“The 17.15 billion baht to build the new Prachinburi assembly & engine plant covers the cost of acquiring some 1,600 rai (approximately 2.56 million square meters) of land and constructing a new car assembly & engine plant with floor space of around 134 rai (approximately 214,000 square meters). Scheduled to begin operating in 2015, the new plant will have a production capacity of 120,000 units per year. At the start of production, it will employ approximately 2,500 associates including seasonal workers,” said
Mr. Kobayashi.
Honda aims to make the new assembly plant the company’s most advanced manufacturing facility in Asia & Oceania. It will follow the advanced manufacturing innovations that are now being introduced at Honda’s new Yorii auto assembly plant in Japan. They include shorter and greener production processes for welding, painting and assembling automobiles that offer the highest levels of efficiency. The new Prachinburi assembly plant will also mark the next level of advancement with reduced CO2 emissions and use of recycled water to minimize water use in all production processes.
The new Prachinburi plant will mainly produce sub-compact models to meet the increasing global demand for these vehicles. “As we envision continuous growth of the sub-compact car market in Thailand and more exports to countries in ASEAN, Oceania, the Middle East, Africa, the Caribbean and other countries around the world, Honda will increase our production capacity while also enhancing our product lineup,” said Mr. Kobayashi.
Honda recently invested approximately 880 million baht in the first phase of the Ayutthaya assembly plant expansion, which is now complete. The annual production capacity for the Ayutthaya plant was increased from 240,000 units to 280,000 units as of the end of January 2013. Honda will implement the second phase of the expansion plan for the plant starting in April 2013. The company will invest approximately 2.03 billion baht to increase the Ayutthaya plant’s annual production capacity to 300,000 units by early 2014.
“The Ayutthaya plant expansion, combined with the capacity of the new Prachinburi plant, will increase Honda’s total annual production capacity for vehicles in Thailand to 420,000 units in 2015. The ratio of products for the domestic market and exports will be about 70:30. This represents approximately 300,000 units for the Thai domestic market and 120,000 units for export each year,” explained Mr. Kobayashi.
Honda believes that sales volume for the Thai market this year should be equal to or slightly lower than 2012. Overall turnover for the Thai market is expected to be about 1.2 million units. Honda has set a sales target for Thailand of more than 200,000 units in 2013.
“Thailand became the biggest automobile market in ASEAN in 2012 and remains a very important market for Honda. We are very much committed to expanding our footprint in Thailand through the major investments in increased production capacity. Striving to be a company that society wants to exist, Honda will not only be manufacturing products for customers in Thailand. We will expand our role as a base for the export of automobiles and parts regionally and around the world — and we are very excited to take on these new challenges with our associates in Thailand to help drive Honda’s future success,” concluded Mr. Kobayashi.