MANILA, Philippines – The country will no longer resume domestic assembly of the Honda Civic, after the Japanese carmaker decided to produce the ninth generation of the model in Thailand.
During the launch of its latest model, Tatsuya Natsume, president and general manager of Honda Cars Philippines Inc. (HCPI), told reporters that the company would not be responsible for manufacturing the latest model of the Civic after local assembly of the car halted in July last year.
Following the halt in domestic production, the Philippines had been importing the Civic from Japan until an earthquake in September altogether cut off supply of the model. Japanese imports have since resumed, especially after massive flooding disrupted Honda’s operations in Thailand. But once the Thai operations have normalized, the Philippines would resume completely built up (CBU) imports from Bangkok, Natsume said.
He said the Philippines lacked “economies of scale,” with a capacity of only 9,000 to 10,000 units at HCPI’s Sta. Rosa, Laguna plant. In contrast, Honda’s Thai unit has an annual capacity of 240,000.
Add to that, the Asean Free Trade Area has brought down tariffs on CBU imports from other members of the bloc to zero. CBU imports from Japan are slapped a higher 20 percent tariff.
Despite the end of its Civic assembly operations, HCPI would retain the 530 workers, redeploying them to the manufacture of the City, Natsume said.
He said the unfilled capacity would be replaced by the growing demand for the City.
“City’s sales is a lot higher so its better to continue City and that has replaced Civic volume,” the executive said.
HCPI sold 9,000 units of the City last year.
Meanwhile, sales of the ninth generation Civic are forecast at 350 units a month, a far cry from the earlier models’ 9,000 a month sales.
HCPI sales dropped by 30 percent to 11,611 units last year from 16,604 units in 2010.
The car manufacturer blamed the drop in sales on the lack of supply of units because of the tsunami and earthquake in Japan as well as the flooding in Thailand last year.
source: interaksyon.com
