November 29, 2011 / 8:06 AM / in 6 years

UPDATE 2-Thailand lets Honda import cars tariff-free to June

* Floods will slash Thai sales by 30 pct this year

* Honda is car firm worst affected by floods

* Honda and other car firms can bring in parts tariff-free (Adds para 3 and context on Honda’s sales in para 6)

By Pracha Hariraksapitak

BANGKOK, Nov 29 (Reuters) - Thailand’s government said on Tuesday it would let Honda Motor Co import assembled cars tariff-free until next June to replace output lost because of recent flooding.

All car producers in the country would be able to import parts and machinery tariff-free to replace goods damaged by the flooding, but only Honda will be allowed to bring in complete vehicles until June 30 and with effect from Oct. 25.

Japan’s third-largest car maker has been hit the hardest as floods entirely shut down its plant in Rojana Industrial Park Pcl and about 35 of its tier-one suppliers were affected.

The imported amounts must not exceed the total normally produced in the country, Industry Minister Wannarat Channukul told reporters after a cabinet meeting.

“We will offer this until June next year because we expect the situation to get back to normal by then,” Wannarat said.

Pitak Pruittisarikorn, executive vice president of Honda Automobile (Thailand), said he expected flooding to cut its 2011 domestic sales by 30 percent from the normal 120,000 units.

Honda has an assembly plant with capacity of 240,000 cars a year on the industrial estate that was flooded in central Ayutthaya province, affecting 4.7 percent of its global output.

Most of the other big car firms have their factories in the east in Rayong province.

Japanese business daily Nikkei reported on Tuesday that Honda planned to resume production at its flood-hit plant from April.

Honda said in a statement on Monday that it had finished draining water from the plant on the Rojana Industrial Park and had started the process of cleaning up.

Thailand’s worst flooding in at least 50 years shut down seven big industrial estates in October, affecting the car and electronics sectors in particular. More than 600 people have died and parts of Bangkok are still under water. .

Thailand is a regional hub for the world’s top car makers, and even if most of their big assembly plants were spared, car part firms have suffered, disrupting supply chains.

Thailand’s government had already moved to help industry by waiving tariffs on machinery imported to replace items ruined in the floods and on damaged raw materials that would go into re-exported goods.

Writing by Orathai Sriring and Ploy Ten Kate; Editing by Alan Raybould

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