Honda Cars Philippines Inc. said it will shut down its manufacturing facility that employs 387 workers in Sta. Rosa, Laguna next month.
HCPI said in a statement the decision to close the Philippine plant that assembles subcompact model City and compact SUV model BR-V aimed to optimize its production operations in Asia. The company said it would continue its automobile sales and after-sales service operation in the Philippines through the utilization of Honda’s Asia and Oceania regional network.
“To meet Honda’s customer needs in the Philippines for reasonably priced and good-quality products, Honda considered efficient allocation and distribution of resources,” the Japanese carmaker said.
“As such, after consideration of optimization efforts in the production operations in Asia and Oceania region, Honda decided to close the manufacturing operations of HCPI,” it said.
HCPI started its assembly operations in 1992 under the Philippine government’s Car Development Program with a total capital investment of P1.9 billion.
It currently employs 650 workers with 38 dealers nationwide and about 60 parts and materials suppliers.
Trade Secretary Ramon Lopez said in a statement he would meet with HCPI officials on Monday to consider alternative options to minimize the impact of the plant closure.
Lopez said the department would also study the need to impose safeguard duty and other support measures to protect the local vehicle manufacturers.
“The cost structure of their local car assembly, which has about 380 workers, is basically challenged and there is no protection, thus making imports of vehicles as a cheaper alternative. Vehicle imports have been growing, causing injury to the industry from assembly to local parts supply network in the country,” Lopez said.
Presidential Spokesperson Salvador Panelo said the closure of Honda’s plant would create just a “minimal” impact on the economy. He said despite the latest development, “many foreign companies that are coming in.”
HCPI said it would continue providing highly attractive products to its customers in the Philippines and continue contributing to the local society which has been an ongoing effort for the last 50 years since Honda was established in the Philippines.Jenniffer B. Austria
HCPI is 74.2-percent owned by Honda Motor Co. Ltd. of Japan, while Ayala-led AC Industrial Technology Holdings Inc. and Rizal Commercial Banking Corp. each own 12.9-percent stake in the local car manufacturer.
HCPI registered a 12.7-percent percent decline in car sales in 2019 to 20,338 units. The downtrend continued this year.
HCPI sold 1,769 vehicles in January, down 9 percent from 1,943 units in the same month last year.
Honda is one of the few global brands with manufacturing operations for automobiles, motorcycles, power products and parts and components in the Philippines.