Honda chairman sees growth potential In Southeast Asia
Honda chairman sees growth potential In Southeast Asia
BANGKOK (Dow Jones): Honda Motor Co.'s (HMC or 7267) chairman said Wednesday the company plans to pump more resources into Southeast Asia to meet new demand as the region's economies recover.
"The economy of Thailand is on the recovery path, as are economies of other Asean markets," Yoshihide Munekuni told reporters.
"Honda will try to invest more to adjust our business strategy to meet with the economic recovery in ASEAN," he said, adding the company planned to launch more new products and search for new markets.
Later Wednesday, Munekuni will meet with other chief executives from international companies and government ministers at a business forum.
The event aims to promote the Board of Investment's trade fair which will showcase Thai products and investment opportunities. The fair runs from Thursday until Feb. 17.
Asian Honda Motor Co., the Japanese car maker's Bangkok-based regional production center, expects Thailand's passenger car market to grow at least 20 percent on year in 2000, said the unit's president, Satoshi Toshida.
Honda will increase the production of passenger cars this year from its Thai facilities to meet the new demand, he added.
Last year, the company produced at half of its full 60,000 units per year capacity, running on only one working shift.
"This year we will increase our production capacity from one working shift last year to two shifts," Toshida said, adding that this would allow full capacity production if demand continues to grow.
Thailand's motorcycle market should grow by around 15 percent to 20 percent this year, he added. Honda hopes to increase its production of motorcycles from 600,000 units in 1999 to closer to its full capacity of 1 million this year.
The Japanese car manufacturer also plans to increase exports from its Thai operations, through looking for new markets, Toshida said.
Currently, Honda exports about 30 percent of its total production to around 50 countries, earning the company 17 billion baht last year. Australia is the main export market for passenger cars, while motorcycles go mainly to other Asean countries.
The Association of Southeast Asian Nations, or ASEAN, comprises Thailand, Malaysia, Singapore, Indonesia, Brunei, Vietnam, Myanmar, Laos, Cambodia and the Philippines.
Honda employs 6,000 people in Thailand, where it had the second largest share of the domestic passenger car market last year, accounting for 30 percent of total sales. Toyota Motor Corp. had a 36 percent share of local sales.
In terms of the overall vehicle sales in Thailand, Honda is the third largest after Toyota and Isuzu Motors Ltd. (J.IZM) because it doesn't produce one-ton pick up trucks which sell well in rural Thailand.