AYUTTHAYA, Thailand, March 31 - Honda Motor Co,
Japan's third-largest car maker, officially resumed production
on Saturday at its plant in Ayutthaya in Thailand, which was
forced to close for almost six months after severe flooding last
Pitak Pruittisarikorn, executive vice-president for Honda
Automobile (Thailand), told a news conference the plant should
produce 150,000 vehicles in the remaining nine months of 2012
and the target was for output of 240,000 per year.
"Thailand remains the most important production base in Asia
and Oceania. We want to reassure you that Honda is not moving
its production base to anywhere else," he said.
Earlier this month, it announced was investing $337 million
in a new plant in Indonesia, but Hiroshi Kobayashi, president
and chief executive of Asian Honda Motor Co Ltd, said that did
not mean it was neglecting Thailand.
"Regardless of the floods, Thailand's market is still
increasing. Thailand's demand is still increasing, so is
India's and Indonesia's, so why do we have to reduce production
here?" he said.
Analysts say Honda will probably need more production
capacity in Thailand in the next few years after it added the
entry-level Brio hatchback to its line-up last year.
Thailand is a key base for companies in the car and
electronics sectors in particular, and their global supply
chains were disrupted by the floods that forced seven huge
industrial estates to close last year. Less than half of the
affected plants have reopened, according to government data.
Honda was the hardest hit of the car firms. Japanese rivals
Toyota Motor Corp and Nissan Motor Co were
able to resume production by the end of 2011.
On March 27, Japanese business daily Nikkei reported that
Honda planned to build another automobile factory in Thailand,
probably in the southeast of the country where the risk of
flooding is lower.
Honda executives said on Saturday there were no such plans
at this time.
"Initially we want to focus on full recovery for the
Ayutthaya factory," Pitak said. "But if in the future there's a
necessity, then we'll have to decide."
Big firms are increasingly interested in neighbouring
Myanmar, which has rapidly emerged from isolation after a
civilian government took office a year ago after decade of
military rule. Western governments may start to lift sanctions
if elections on April 1 are deemed free and fair.
Kobayashi said it was too early for Honda, but it could be
"In the future, yes. But it would probably be more for the
production of motorcycles. We've just started research.
Depending on circumstances, if they are ready, we will go."
(Editing by Alan Raybould and Ed Lane)