BOI okays P2.5-B Honda expansion

MANILA, Philippines - Honda Philippines Inc. (HPI) got the nod of the Board of Investments (BOI) for its P2.46-billion expansion project.

HPI is expanding its motorcycle production. The new facility will provide an additional capacity of 200,000 units annually at its existing plant in First Philippine Industrial Park, Tanauan City, Batangas.

HPI currently manufactures 400,000 motorcycle units yearly. “This will accommodate the strong demand for motorcycles in the years to come as it sustain its annual double digit growth. Motorcycles are considered as an affordable means of transport for Filipinos,” Trade Secretary and BOI chairman Gregory L. Domingo said.

The P2.46-billion project involves the construction of new buildings and the acquisition and installation of additional machines and equipment for the production of motorcycles, parts and components. It will have an in-house manufacturing of major parts and components, e.g. engine parts, frames/chassis, fuel tanks and major plastic components for various models of motorcycles.

The expansion will entail an additional 507 employees. Start of commercial operations is scheduled for April 2012 and will be implemented for the next three years. Due to the magnitude in the amount of its investments, the project qualifies for pioneer status.

Initially, the project will produce automatic transmission (AT) models. All of these models are equipped with 110cc automatic transmission engine mounted with linked assembly engine hanger, with different body frame configuration, different headlamps and tail lights design, and different plastic body cover shapes and stripes design.

Assembly process requires different conveyor clamper equipped with wheel lock for rear wheel tightening. While other motorcycle models are provided with step bar on left and right side of the unit, these Scooter models have footrest (platform) in front as an integral part of the body. The firm will also be producing new and other existing non-AT models in the next midterm.

The high-value parts of its in-house production would also provide opportunity for future export to other countries with Honda plants. A minimum target of 30 percent weighted average by part will be implemented for localization. However, localization program for new models will depend on the capabilities of local parts makers. Motorcycles produced will be sold through its 825 dealers nationwide.