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Fri, 01 Jun 2001

JP/Honda to base minivan production in RI

Honda to base minivan production in RI

TOKYO (Nikkei) Honda Motor and Toyota Motor Corp. will overhaul plants in Southeast Asia in time for the 2002 start of the ASEAN Free Trade Area agreement, which lowers tariffs on all imports to 5 percent or less.

The automakers will reorganize plants in the region mainly serving the Japanese market to become exporters to members of the Association of Southeast Asian Nations.

Honda will designate Indonesia as the production base for its Stream minivans, with an initial output of 7,000-7,800 vehicles starting later this year.

At the same time, the plant will reduce production of passenger cars, which are in less demand locally, leaving Honda's Malaysian plant to supply the Accord and other passenger cars to the Indonesian market.

The reorganization marks the first time that Honda plants in Thailand and Malaysia will cross-supply complete cars.

Honda will invest 5 billion yen building a new plant in Malaysia to turn out 20,000 passenger cars annually from 2003, including the Civic. By 2005, Malaysia will be a major production base for passenger cars, along with Thailand.

Under the ASEAN free trade pact, Malaysia has been allowed to delay reducing tariffs on completed vehicles until 2005.

Toyota will designate Thailand as the key production base for a new model Corolla and other automobiles and has begun exporting semi-finished parts from its Thai plant to smaller ASEAN markets for final assembly.

Affiliate Hino Motors Ltd. will begin exporting trucks from Thailand to other ASEAN countries in 2004, when it releases a new model. The firm hopes to raise annual output at the Thai plant to 20,000 units from the present 3,000.

General Motors Corp., Ford Motor Co. and other U.S. automakers, which lag rivals in Southeast Asian output, will lift production in Thailand through their Japanese affiliates.

New car production in Southeast Asia soared 50 percent in 2000 to 1.08 million units, recovering 70 percent of the level marked before the 1997-98 currency crises which ravaged the region, the report said.