Honda Cars Philippines has just announced that they will be shutting down their factory in Santa Rosa, Laguna. That means the Honda City and Honda BR-V will no longer be assembled in the Philippines.
The announcement was very unexpected, and will take almost immediate effect: the announcement stated that they will shut down the plant March 2020, or next month.
The press statement stated that Honda decided to close production operations in an effort to optimize its operations in both Asia and Oceania regions. In other words, the sales volume of the BR-V and City were not enough to sustain operations at the factory, and that Honda will have to revert to sourcing units from Thailand; their major ASEAN production hub.
Honda is currently sitting at #7 in the top 10 auto brands in the country, having only sold a total of just 20,338 units back in 2019 along with a 4.88% market share. In 2018, they had a better performance after selling 23,294 units and achieving a market share of 5.80%.
HCPI stated that automobile sales, as well as after-sales service operations will continue to the Philippines, through the utilization of Honda's Asia and Oceania regional network.
The factory has been in operation since 1990; it would have celebrated its 30th anniversary this year. HCPI has a total of about 600 employees (associates) which includes the staff at their headquarters in BGC as well as the factory, though we expect the majority of that number to be employed in Santa Rosa.
With the factory's closure this coming March, it closes another chapter in the country's local automotive production. Ford was the last major automaker in the Philippines to forego all production operations in the country, opting instead to be a importer/distributor. Their former factory is now owned by Mitsubishi Motors Philippines. Last January 2019, Isuzu Philippines Corporation also announced that they will stop complete knock down (CKD) manufacturing of the D-Max due to high overhead costs, economies of scales versus Thailand, and meeting local customer demands.