Support sought as Honda vows to stay

“We are responsible for more than 10,000 workers and dealers nationwide. We cannot stumble. We will not move out from Thailand. So, in order to smooth Honda’s business, we may have to ask for some relief measures from the government,” said Pitak Pruittisarikorn, executive vice president.
He said the benefits, finally, would extend to the country’s economy as a whole. Honda is working hard to find ways to resume operations as fast as possible so that concerned parties will not be affected much.
He said the recent disruption had also hit exports from Honda’s manufacturing base in Thailand. It has only limited stocks for export. The parent company in Japan is sourcing vehicles from other manufacturing bases to serve the export markets to which Honda Thailand is unable to deliver the vehicles.
Honda has a production capacity of 240,000 units per year, half of which are for export, accounting for many billions of baht.
He said Honda remained confident about Thailand as a manufacturing base. He urged the government to launch effective measures so that the kind of floods that have hit the automotive and other industries this year can be prevented in the future. He said this would boost foreign investors’ confidence. The management measure to prevent floods not to hit the industrial sector in the future were the key factor to boost the foreign investors’ confidence to remain in Thailand.
Some industries may decide to relocate their investments if they are not confident about the government’s measures. But Thailand has been a solid base for the automotive industry for a long time. The country is the manufacturing base for many carmakers. Hence, the government must launch preventive measures to save the industry, he added.
Honda is the only carmaker whose assembly plants as well as finished vehicles ready for delivery have been submerged. Honda’s assembly plants located in Rojana Industrial Park in Ayutthaya, were hit by floods last week. The company’s total investment in Thailand is estimated at Bt21 billion. It has a production capacity in Thailand of 240,000 units per annum, accounting for 4.7 per cent of Honda’s global output.
Although other auto-makers have not been hit directly like Honda, they have also had to either cut production capacity or temporarily suspend production, as in the case of Toyota. This is mainly because the suppliers located in Ayutthaya cannot provide auto parts to the assembly plants.
Pitak said Rojana Industrial Park is still under water and hence Honda has halted its production. The resumption of production would depend on when the government is able to drain out the water.