Honda to cease productions in Ayutthaya by 2025, EV competition

Image courtesy of Kyodo/Japan Times

Honda Motor will cease vehicle production at its Ayutthaya factory by 2025, redirecting its efforts to consolidate operations at the Prachin Buri plant, the company announced today, July 9.

This strategic shift underscores the increasing challenges Japan’s second-largest automaker faces in Southeast Asia, as Chinese brands aggressively vie for market share in Thailand amidst rising consumer interest in electric vehicles (EVs).

A spokesperson confirmed that after ceasing vehicle production, the Ayutthaya plant, which kicked off operations in 1996, will pivot to manufacturing car parts. Vehicle production will be centralised at the Prachin Buri plant, operational since 2016. These two facilities are Honda’s only manufacturing plants in Thailand.

The combined vehicle production at Honda’s Thai plants has declined from 228,000 units in 2019 to below 150,000 annually over the past four years through 2023.

Sales in Thailand have also dropped, remaining under 100,000 units annually for the same period.

The spokesperson noted that Honda aims to address the disparity between production and sales within Thailand. Despite these local challenges, Honda continues to export vehicles from Thailand, primarily to other Southeast Asian markets like Indonesia and the Philippines. Currently, Honda has no plans for new investments in Thailand.

In China, Honda and fellow Japanese automaker Nissan Motor are grappling with intense competition from burgeoning Chinese brands. These competitors attract consumers with affordable, software-enhanced electric vehicles (EVs) and plug-in hybrids.

Japanese automakers risk losing market share in regions outside China, such as Southeast Asia, to emerging Chinese brands that are expanding their export activities and establishing overseas production facilities, reported Bangkok Post.

In related news, BYD inaugurated its first EV manufacturing plant outside China in Rayong, Thailand, marking a significant milestone with the production of its eight millionth new energy vehicle.

The new facility, located on a 600-rai (approximately 948,000 square metres) plot within the WHA Industrial Estate in Rayong, was officially opened on July 4. This marks BYD’s expansion into the global market with an investment exceeding 35 billion baht, covering nine projects including parts and battery production. The plant has a production capacity of 150,000 vehicles per year.

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Ryan Turner

Ryan is a journalism student from Mahidol University with a passion for history, writing and delivering news content with a rich storytelling narrative.

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