THAILAND REPORT
Honda said it plans to integrate its two automotive manufacturing plants in Thailand by 2025. The move will cut annual production capacity in Thailand by 50% to 270,000 units.
Production at the Ayutthaya plant will be discontinued and consolidated at the Prachinburi plant in central Thailand. The Ayutthaya plant has an annual production capacity of 150,000 units. Honda’s total production capacity in Thailand is 270,000 units, but there was a surplus of 147,000 units in 2011. The company will improve the profitability of its four-wheel business by reducing fixed costs. The Ayutthaya plant will continue to be used as an auto parts plant.
Source: The Nikkei
PSR Analysis: Just last month in PowerTALK, I reported on Suzuki’s withdrawal from four-wheel production in Thailand, and now it is clear that Honda is also struggling in the Thai market due to the rapid growth of EVs, with the Japanese brand’s share falling 8% year-on-year to 78% in 2023. By 2024, the share is expected to fall even further.
While some in Europe and the U.S. are discussing a review of BEVs, the debate is not as active in Southeast Asia. The region has reserves of rare metals needed for EV batteries, and each country has positioned EV manufacturing as a growth driver for its national manufacturing industry. Since it is difficult to change policy, EVs will continue to be promoted in the future. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
