Flooded Hondas destroyed; factories to restart by June

The process of destroying the ruined cars began yesterday. Pitak Pruittisarikorn, executive vice president of Honda Automobile (Thailand), said the plants’ rehabilitation was underway. He expects operations to resume by June, seven months after the assembly plants in Rojana Industrial Park succumbed to massive flooding on October 8.

Honda is revising its global business plan, with the production of parts to be scattered in other countries to reduce risks and balance its supply chain, he said. Because of the disrupted production, there will be a slight delay in the launch of the redesigned Civic and Jazz next year. 

“Losses from the flood damage have not been finalised yet,”  he said. “But we are nearly 100-per-cent insured.” 

Honda has won the government’s approval for a waiver on import duty for completely built units.

“We’re working out which models will be imported. It still needs further consideration on the volume and models, jointly with the Industry Ministry and relevant agencies such as the Customs Department. Mostly, they will be imported from Japan, in volumes close to our domestic sales volume. 

“The prices are not finalised yet but they will not be cheaper than the locally produced units, given extra excise tax and transport costs.” 

The plants, employing 7,074 workers, have capacity of 240,000 units a year. They produce six models – Brio, Jazz, City, Civic, Accord and CR-V – for the local market and distribution to more than 30 other countries. 

A source in the automotive industry estimates Honda’s loss to this point at more than Bt5 billion. 

Yesterday, Honda started destruction of the damaged vehicles, to assure customers that no damaged parts would find their way to the market. 

More than 300 local and foreign journalists were invited to witness the first day of the destruction process, along with officials from relevant government units as well as representatives from the Consumer Protection Board, dealers, and the Thailand Automotive Institute. Of the total, Brio accounted for 217 units, Jazz 213, City 353, Civic 150, Accord 91, CR-V 30, and Freed one. The destruction is to be completed within a month. 

“Honda’s policy is to guarantee maximum product quality. We have imposed a strict process to destroy all bodies, components and parts. This is to assure all customers that none will leave the premises or be reused,” Pitak said.