Honda says may postpone new Thai plant on political crisis, lowers sale

TOKYO, April 11 Fri Apr 11, 2014 7:20am EDT

TOKYO, April 11 (Reuters) - Honda Motor Co said on Friday it may postpone the start-up of a new $530 million manufacturing plant in Thailand as economic and political uncertainty drives automakers to rethink their investments.

The plant in Prachinburi, with an annual capacity of 120,000 vehicles, is currently slated to start operating in April, 2015. Honda spokeswoman Kumiko Hashimoto said that the company may reconsider that date.

Toyota Motor Corp, the biggest car maker in Thailand, signalled frustration over a drawn-out political crisis in January by saying that it may reconsider investing up to 20 billion baht in Thailand and could even cut production if unrest drags on.

Street rallies by anti-government protesters hoping to dislodge Prime Minister Yingluck Shinawatra have led to a political crisis in Southeast Asia's second-biggest economy, threatening its position as a major auto manufacturing and export hub.

Indonesia is expected to overtake Thailand as the region's biggest car market as early as this year, company executives and analysts said. Thai vehicle sales are also expected to fall 11.7 per cent to 1.175 million in 2014 from a year earlier due to the political crisis, according to Frost & Sullivan, a market research and consultancy firm.

Honda expects its Thai car sales to drop at least 24 percent from last year's sales of 213,000 vehicles, it said in January. (Reporting by Yoko Kubota; Editing by Miral Fahmy)

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