Honda to Stop Car Production in Thai Factory by 2025 Amid Challenges

TapTechNews July 9th news, Japanese automaker Honda Motor announced on Tuesday that it plans to stop car production at its factory in Ayutthaya, Thailand by 2025 and integrate production capacity into its factory in Prachinburi. This move highlights the tough situation Honda is facing in the Southeast Asian market. Chinese brands are actively entering the Thai market to seize market share, while the demand for electric vehicles is also constantly increasing.

Honda to Stop Car Production in Thai Factory by 2025 Amid Challenges_0

A Honda spokesperson said that after the car production at the Ayutthaya factory stops, the company plans to transform it into a parts production base. The factory was built in 1996 and is one of only two factories Honda has in Thailand. The other factory located in Prachinburi was built in 2016 and will be responsible for all car production.

Data shows that Honda's car production in Thailand has dropped from 228,000 vehicles in 2019 to less than 150,000 vehicles per year in 2023. During the same period, Honda's car sales in Thailand have also been consistently lower than 100,000 vehicles.

A Honda spokesperson said that the company hopes to narrow the gap between production and sales in the Thai market through this integration. Currently, Honda has been exporting cars from Thailand to other Southeast Asian countries such as Indonesia and the Philippines.

The spokesperson also said that Honda currently has no new investment plans in Thailand.

TapTechNews noted that in the Chinese market, Honda and other Japanese automakers, such as Nissan Motor, are facing fierce competition from the rising Chinese car brands, which have attracted a large number of consumers with their low-priced and richly-equipped electric vehicles and plug-in hybrid vehicles.

Now, Japanese automakers are not only facing competition from Chinese brands in the Chinese market, but also facing challenges in overseas markets such as Southeast Asia. More and more Chinese car brands are seeking to expand car exports and establish factories overseas. Last week, BYD opened a battery electric vehicle factory in Thailand.