Honda fears running out of vehicles to sell due to Thailand floods

MANILA, Philippines - Honda Cars Philippines Inc. (HCPI) is worried that it will run out of new vehicles to sell by this month or December as a result of the prolonged massive flooding in Thailand.

An industry insider who spoke on condition of anonymity said the local Honda unit is concerned that its dealers may suffer because they foresee the lack of vehicles to sell.

Honda has already suspended its local production of Civic and City models indefinitely due to supply problems as a result of the flooding in Thailand. The CRV, Accord and Jazz models, on the other hand, are all imported completely built from Thailand.

The industry insider said Honda is worried its delaers will run out of stocks either November or December.

Honda has already informed the Board of Investments (BOI) of this concern during their meeting last Thursday. In spite of this, Honda refused to give any official statement regarding the back-orders.

This is the second time this year that Honda has shut down its manufacturing plant here. The first was when tsunami and earthquake hit Japan in March. Before the Japan crisis, HCPI used to produce 45 to 50 units of City and Civic per day. This was cut in half after the twin disasters in Japan affected supply.

In a statement, Honda said Honda Automobile (Thailand) Co., Ltd. (HATC), the Honda automobile production subsidiary in Thailand (headquartered in the Rojana Industrial Park, Ayutthaya province) has suspended production since Oct. 4 due to parts supply disruptions. As of Oct. 31, HATC does not have a clear outlook when production will resume as flood water on its facilities continued to rise.

Meanwhile, the source said the Philippine government should take this opportunity to court more investments in the auto manufacturing industry. Thailand is one of the biggest competitors of the Philippines in terms of a possible location for a manufacturing plant. However, the BOI is hesitant to court auto investments at this time because the agency feels that it is not the proper time given the Thailand situation.

However, the source insisted that this is the perfect time to get more investments in the industry. The source said the government can go to Japan and market the Philippines as a viable investment destination.