Honda Automobile Thailand has announced that it will be building a second assembly & engine plant in Prachinburi province worth $575.9 million. The new plant is scheduled to begin construction in July this year and is said to commence operations in 2015 with a production capacity of 120,000 units a year. Its current facility located in Ayutthaya, which temporarily stopped operations during the 'Great Thailand Flood' in 2011; will also receive a $97.7 million upgrade to increase its capacity to 300,000 units by early 2014. Once both proejcts are completed, Honda Thailand will have an annual production capacity of 420,000 units.
"The $575 million to build the new Prachinburi assembly & engine plant covers the cost of acquiring some 1,600 rai (approximately 2.56 million square meters) of land and constructing a new car assembly & engine plant with floor space of around 134 rai (approximately 214,000 square meters). Scheduled to begin operating in 2015, the new plant will have a production capacity of 120,000 units per year. At the start of production, it will employ approximately 2,500 associates including seasonal workers," said Mr. Hiroshi Kobayashi, Presidena & CEO of Honda Automobile Thailand.
Honda is aiming to attract 6 million new car customers around the world under its next mid-term business plan, which runs through the fiscal year ending in March, 2017. To enable this ambitious growth, Honda will implement global operational changes that will allow the company to offer the best vehicle specifications at competitive costs. This includes three key initiatives, which are: 1) Concurrent product development in all six regions of the world, in which new models will launch in all regions within a shorter period of time, enabling Honda to reach higher levels of global production volume very quickly. This will significantly reduce the production cost; 2) Adopting locally-optimized design drawings, which will also maximize the use of raw materials and local production systems to serve customer needs in each area quickly and efficiently; and 3) Improving production efficiency.
The new assembly plant that will mainly produce sub-compact models, will be the company's most advanced manufacturing facility in Asia & Oceania. It will follow the advanced manufacturing innovations that are now being introduced at Honda's new Yorii auto assembly plant in Japan. They include shorter and greener production processes for welding, painting and assembling automobiles that offer the highest levels of efficiency. The new Prachinburi assembly plant will also mark the next level of advancement with reduced CO2 emissions and use of recycled water to minimize water use in all production processes.
"As we envision continuous growth of the sub-compact car market in Thailand and more exports to countries in ASEAN, Oceania, the Middle East, Africa, the Caribbean and other countries around the world, Honda will increase our production capacity while also enhancing our product lineup," added Kobayashi.
This announcement casts a strong on the future of Honda's auto assembly activities in the Philippines. Honda assembles the current model City, a sub-compact car in their facility in Santa Rosa, Laguna.