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Honda Motor Co., Ltd. (NYSE:HMC) disclosed that it will reportedly cease vehicle production at its Ayutthaya province factory in Thailand by 2025.
The move reflects the company’s intention to consolidate production at its plant in Prachinburi province, reported Reuters.
This reflects the challenging environment for Japan’s second-largest automaker in Thailand, where Chinese brands are aggressively competing for market share alongside rising consumer demand for electric vehicles.
According to the report, Honda intends to transition its Ayutthaya plant, inaugurated in 1996, from vehicle production to car part manufacturing after next year.
Honda will centralize vehicle production at its Prachinburi plant, which began operations in 2016, the spokesperson confirmed. These are Honda’s only factories in Thailand. Combined production at these plants has declined from 228,000 vehicles in 2019 to under 150,000 annually in the past four years through 2023.
As per the report, Honda’s annual sales in Thailand remained below 100,000 units for the past four years until last year. The company aims to align local vehicle production with sales and continues to export to Southeast Asian markets without plans for new investments in Thailand.
Also Read: Insurers To Sell $3.1B In Honda Shares In Wake Of Governance Push: Report
Last month, Honda announced the launch of its new N-VAN e, a mini-electric vehicle (EV) specifically designed for commercial use, which will start selling in Japan on October 10, 2024.
In May, Honda said it aims to spend around $65 billion over the next decade on electrification and software development, effectively doubling the amount it committed just two years ago.
Investors can gain exposure to the stock via SPDR S&P Kensho Smart Mobility ETF (NYSE:HAIL) and ETF Opportunities Trust WealthTrust DBS Long Term Growth ETF (NYSE:WLTG)
Price Action: HMC shares closed lower by 1.94% at $31.82 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
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