Sales slump nothing to do with shake-up of Honda’s Ayutthaya plant

The Federation of Thai Industries (FTI) believes that Honda Automobile’s decision to shift its production base from Ayutthaya to Prachinburi was not prompted by the slump in sales in Thailand.

“Honda is a well-established Japanese brand in Thailand that will not be easily affected by sales,” Surapong Paisitpattanapong, vice president and spokesperson of the FTI's automotive industry club, said on Monday.

“The restructuring of production facilities is likely a bid to adapt to the changing production technology, especially in electric and hybrid vehicles,” he said. “Almost every automaker has undergone internal and external restructuring, including those in the US and China.”

Honda’s plan to cease car production at its Ayutthaya facility has sparked concerns among analysts, who believe this is the start of a new trend in the industry.

The automaker will use its Ayutthaya factory exclusively for manufacturing parts for export.

In May, Suzuki Motor (Thailand) announced that it would shut all its factories in Thailand by the end of 2025 due to a continual slump in sales and fierce competition from Chinese electric vehicles (EVs).

Meanwhile, Tan Chong Subaru Automotive (Thailand) also announced that it will halt the manufacturing of vehicles in Thailand by yearend after suffering losses for five consecutive years.

TTB Analytics projects that the Thai automotive industry will face a significant decline in 2024. During the first five months of the year, car sales have dropped sharply by 23.8% compared to the same period last year. This is possibly the most significant drop in 15 years.

In an earlier statement, Honda Automobile (Thailand) said its restructuring of production facilities in Thailand aims to maximise its production capacity in complete built-up vehicles. 

The company said it is making changes in line with the “xEV” era, or the incorporation of electricity into its new products.

Honda said its e:HEV series hybrid vehicles were responsible for 32% of its sales in 2023, and it expects this ratio to grow to 70% this year.

Honda established the first manufacturing plant in Thailand in 1996 at Rojana Industrial Park in Ayutthaya province. 

In 2013, the automaker announced a 17.15-billion-baht investment in a new production facility at Rojana Industrial Park in Prachinburi province. Two years later Honda R&D Asia Pacific began building a 1.7-billion-baht Proving Ground test drive centre within the compound of its Prachinburi facility.

Honda’s Ayutthaya plant has the capacity to produce 150,000 units per year, covering models such as Accord, BR-V, HR-V, CR-V and Civic.

Meanwhile, the Prachinburi plant can produce 120,000 units per year of models such as Civic hatchback, Jazz,City, and e:N1, the company’s first electric vehicle.

Honda reported 37,374 units sold in five months of 2024, contracting only 4.3% year on year, versus 23.8% contraction of the overall automotive market.