Honda’s decision to shut its Philippine assembly plant came down to a single, uncomfortable number: the factory could build 15,000 cars a year and last year made just 8,000.
The closure, announced on Saturday and effective March 25, ends production of the BR-V and City in Santa Rosa, Laguna, and cuts 387 factory jobs. Strategically, the calculus is straightforward. Honda wants to concentrate its resources on electric vehicles and other future trends, and the global auto slowdown has pushed headquarters to shed low-volume plants.
Louie Soriano, the spokesperson of Honda Cars Philippines, put the reason plainly: “Honda needs to close down the Philippine factory because of its low production volume. It’s not because of an issue on politics, or an issue on government policy, or on labor union. It’s none of that.”
The broader stakes are measured in units. Honda’s UK factory, also slated to close, has a capacity of 250,000 cars a year and built 160,000 in 2018. Against that scale, the Philippine plant’s 15,000-unit ceiling made it an easy target.
The local sales figures pointed the same way. Honda’s Philippine volume fell 26.7 percent in 2018 and then by nearly 13 percent in 2019, from 23,294 units to 20,338, after the Duterte administration raised excise taxes on new vehicles under the TRAIN law and inflation chilled demand.
What this signals for the industry is unease. Campi, the country’s largest auto group, called the closure “unfortunate” and warned that any policy discouraging local assembly would “further endanger employment and existing investments.” Trade Secretary Ramon Lopez met HCPI’s president on Monday but conceded the decision was already made.
Honda is also ending manufacturing in Turkey and the United Kingdom, though those plants get until 2021 to wind down.
Sources
- Honda PH assembly plant closure: Too few cars | Inquirer Business
- What happened when Honda PH told its workers about the plant closure? | VISOR
