Honda Motor to close Philippine plant in March as part of global restructuring

25, Feb. 2020

Photo by emrecan arık on Unsplash
Photo by emrecan arık on Unsplash

MANILA, NNA - Honda Motor Co. will close its vehicle manufacturing plant in the Philippines in late March as part of its restructuring in the Asia-Pacific region.

Honda Motor’s local unit Honda Cars Philippines Inc. in Santa Rosa said on Saturday it will stop production of its BR-V sport utility vehicles and City compact cars, shifting to imports of vehicles from the region. It will continue sales and after-sales operation in the country.

The plant, which started production in 1992, will be shut as early as March 25, with the layoff of nearly 400 employees out of about 650. It produced about 7,000 units in 2019 – far below its annual capacity of about 30,000 units.

“We’ve made the best decision” after considering efficient allocation and distribution of resources to offer reasonably priced vehicles to customers, a spokesman at Honda Motor told NNA.

Honda Motor has struggled in the local market, suffering a 12.7-percent drop in sales to 20,338 units in 2019 with a 5.5-perent market share, which put the Honda brand in fifth place. The units sold there included about 7,000 locally produced BR-V and City vehicles and about 13,000 of 10 imported models, such as Accord sedan and CR-V SUV.

Honda Cars Philippines, which has a capitalization of 1.9 billion pesos ($37.3 million), is owned 74.2 percent by its parent Honda Motor, 12.9 percent each by its local partners AC Industrial Technology Holdings Inc., the holding company of local conglomerate Ayala group and Rizal Commercial Banking Corp., a local lender.

The ownership in the local company will not change after the closure of the plant, a spokeswoman at Honda Motor told NNA on Tuesday. The company sells Honda models through 38 outlets in the local market, she added.