Honda Cars Philippines, Inc. (HCPI) announced recently that it has resumed production after it managed to overcome supply disruption caused by the flooding in Thailand.

HCPI said it has resumed operation in “early January” and that it is set for recovery with the roll out of the new Honda City variants.

The company suspended its local production on Nov. 3 due to limited parts supply caused by the flooding in Thailand. HCPI assembles the Honda City and Honda Civic variants in their factory at the northern Philippine province of Laguna.

HCPI, however, said that other Honda vehicles that are imported from Thailand are not yet available. The company imports models such as Honda Jazz and Accord from Thailand.

Company officials could not say when the imported models could be made available in the Philippine market.

Philippine Star Business News

Tsikot.com Philippines

Total motor vehicle sales in the 11-month period this year declined 1.9 percent to 131,242 units in the same period last year largely pulled down by the significant decline in November sales as the flooding in the Thailand took its toll on the local supply, the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) said.

In a report, CAMPI said the Thai flooding has caused a significant 10.4 percent decline in sales in November as sales in both passenger and commercial vehicles slump to 12,090 units from 13,489 units the previous month. Compared to November last year, the November 2011 sales dropped 3.3 percent.

Of the total sales, the passenger car segment suffered the biggest loss of 5.6 percent as sales hit only a total of 41,789 units from 44,252 units in the same 11-month period last year. Sales of passenger cars in November took a beating with 34.1 percent decrease versus November 2010 sales. The same decline was posted versus October 1011 sales.

The commercial vehicle segment also slightly declined 0.04 percent to 89,453 units from 89,487 units.

“The decline can be attributed to the initial effects of the supply problem in Thailand, which limited the availability of some models in the domestic market,” the CAMPI statement stated. Most of the local carplayers import their completely built up units and parts supplies from Thailand, the region’s automotive hub.

Except for light commercial vehicles (LCVs or the compact sports utility vehicles) and trucks and buses, all other vehicle categories suffered a decline in the January-November 2011 reckoning period.

LCVs managed to post a very modest 0.1 percent improvement to 53,752 units over 53,672 units in the January-November period this year. The LCVs already account for a hefty 59.98 percent of the total domestic vehicle market.

Sales of Asian utility vehicles (AUVs) declined 0.4 percent to 33,036 units from 33,180 units in the same 11 months last year. The LCVs account for 37.08 percent of the total domestic vehicle market. In November, however, LCV sales posted a hefty 21.7 percent increase to 5,741 units versus 4,718 units in November 2010 but it declined a negative 2 percent versus October 2011 sales.

The light trucks category posted a negative 0.7 percent in the January-November period as sales hit only 1,708 units from 1,720 units in the first 11 months of the year. This category also posted a 15.6 percent decrease compared to November 2010 sales of 160 units as November 2011 sales hit only 142 units.

Sales of trucks and buses registered a positive 4.7 percent increase to 958 units sold in the January-November period versus 915 units in the same period last year.

However, sales for this category in the November 2011 posted a sharp decline of 52.3 percent as the sector only sold 61 units versus 136 units in November 2011. It also posted a higher decline of 55.1 percent compared to October 2011 sales of 136 units.

In terms of ranking, Toyota Motor Philippines Corp. posted a 1.2 percent cline in sales for the first 11 months this year with sales of 50,610 units over 51,232 units in the same period last year. For the November month alone, TMPC sold 5,294 units reflecting a 15.1 percent improvement versus the previous month sales performance of 5,896 units.

Manila Bulletin Online

Tsikot.com Philippines

The flooding in Thailand has forced Japanese automaker Honda Motor Co. to temporarily cease operations of some of its units in the region, including Honda Cars Philippines Inc. (HCPI).

In a statement issued Thursday, HCPI said it had temporarily suspended production at its Sta. Rosa, Laguna plant “due to limited parts supply caused by the flooding in Thailand.”

“Honda deeply regrets any inconvenience this may cause our customers, and request their understanding during these times. Honda and its suppliers are devoting all efforts to minimize the impact on our customers,” the statement read.

According to the company, it is not sure when production will resume since it will all depend on developments in Thailand.

Periodic reviews will be conducted to determine the feasibility of restarting operations, it added.

HCPI declined to comment when asked how the Laguna plant personnel would be affected by the halt in production.

“We are not disclosing information on our associates’ working conditions nor on their salaries and benefits. We are continuing to have open communications and a good relationship with our associates during these challenging times,” the company said.

HCPI produces the City and Civic nameplates at its Sta. Rosa plant. The other models that it sells in the country, include the Jazz and CR-V, come from Thailand.

Honda Automobile (Thailand) Co. Ltd. has not been operating since October 4 due to parts supply disruption. As of end-October, it was unclear when the plant could resume manufacturing activities.

The operations of motorcycle and power products producer Thai Honda Manufacturing Co. Ltd. has also been suspended since October 6 due to the same problem.

It is scheduled to start operating again Friday.

Other Honda manufacturing facilities in Asia have adjusted their production volumes due to parts supply limitations, while those in other regions continue to monitor the situation before making any decision.

Honda is the third biggest seller of cars in the Philippines.

In the first eight months of the year, it sold 9,062 units, accounting for 9.7 percent of the market, according to the local auto industry association.

After three months of unusually heavy rains and a failure to release enough water from dams early in the monsoon season, Thailand is now experiencing its worst flooding in half a century.

Honda on Monday announced that it would slash production at its North America plants by 50 percent this week because of the supply problems in Thailand.

Meanwhile, Toyota Motor Philippines (TMP) Corp. will also be implementing a production adjustment this month, also due to the flooding in Thailand.

“We’re maintaining normal working days, but we’re implementing a production adjustment,” TMP vice president Rommel Gutierrez said in a phone interview.

He declined to say by how much the company would scale back its production.

Mitsubishi Motors Philippines Corp. maintained normal operations since none of its plants were affected by the flooding, said Arlan Reyes, MMPC assistant manager for advertising and promotions.

Philippine Daily Inquirer

Tsikot.com Philippines

Honda Cars Philippines Inc. (HCPI) yesterday said it covered more than 70 percent of the Honda Fit (Jazz in the Philippines) and City models that were subjected to voluntary safety recall in February.

HCPI said of the total 5,468 units that are subject of the recall, it has replaced lost motion springs and retainers on 3,893 units with countermeasure parts.

The total 5,468 units are made up of 1.5 liter Honda Jazz and 1.5 liter Honda City, distributed from September 2008 to April 2010.

At least 2,788 City units have been replaced and 1,059 are set for recall. For Jazz, 1,105 units have been replaced and 516 are still subject of recall.

Findings show that the high surface pressure between the lost motion spring retainers and rocker arm slippers results in increased retainer movement that might lead to spring breakage.

The broken spring will then come into contact with other moving parts within the cylinder head and this will initially produce noise and, in the worst case, may cause engine to stall.

No crashes or injuries have been reported related to this defect, Honda said.

HCPI is still operating at half its capacity this month because of supply problems following the disasters in Japan.

Malaya Business Insight

Tsikot.com Philippines

Vehicle and auto parts makers affected by the March 11 earthquake in northern Japan are starting to resume normal operations, with the affected plants now mostly up and running.

According to a report by Japan’s Ministry of Economy, Trade and Industry (Meti), all factories of Honda Motor Co. resumed operations as early as April 11. Those of Toyota Motor Corp. and Nissan Motor Co. followed a week after.

All three car makers have assembly plants in the Philippines.

Toyota Motor Philippines Corp. announced two weeks ago that factory operations would go back to normal starting Wednesday, after several weeks of halving output and implementing a three-day workweek.

In an earlier interview, Honda Cars Philippines Inc. president and general manager Tatsuya Natsume said the car maker’s Sta. Rosa plant would also churn out only half of its normal output until the end of May.

While production could be ramped up again to normal levels after that, he said operations would not be completely normal until the end of the year. For the most part, it was still difficult to say when things would go back to absolute normalcy as the situation in Japan, particularly in the parts market, was still very fluid.

He said the most critical vehicle component that various auto manufacturers, not only Honda, were having problems with in terms of supply was the automotive microchip, being supplied mainly by Japan’s Renesas Electronics Corp.

Inquirer Business

Tsikot.com Philippines

Despite sagging sales and raw material supply problems, Honda Cars Philippines Inc. (HCPI) launched Tuesday night its flagship model – the Honda Accord – in a simple ceremony that was devoid of the pomp and pageantry that characterized product launches of the past.

The 2011 Honda Accord which became available in the local market starting yesterday, was described by HCPI president and general manager Tatsuya Natsume as “the ultimate premium vehicle of choice for those who truly understand power and technology.”

The new model retails at an introducty price of P1.7 million for the 2.4-liter variant and P2.05 million for the 3.5-liter variant with five colors to choose from: Brilliant White Pearl, Crystal Black, Polished Metal, Bold Beige and Urban Titanium.

The launching came amid a bleak scenario where the company expects to miss its sales target and may even post lower sales than last year’s as a result of supply problems spawned by the earthquake and tsunami that hit Japan early this year.

In an interview on the sidelines of Tuesday night’s Honda Accord launch, corporate communications and vehicle sales head Voltaire Gonzales said their 17,600 units sales target is currently under review. In fact, he said there is a chance their sales will be even lower than the 16,600 units Honda sold last year.

“Our sales this year will be lower than our sales plan. It might even be lower than our sales last year,” he said.

Since April, Honda has been producing at 50-percent capacity and this is expected to continue until June. By that time Gonzales said they will have a clearer picture of the supply situation.

“We just want to warn everyone because the auto industry has an effect on other industries like banks and insurance. We just want to be honest and say we are still affected by the crisis,” he said.

“Everything is unstable at the moment,” Honda president Tatsuya Natsume said.

Before the crisis, they used to produce 45 to 50 units of City and Civic per day.

Even with the production cuts, Natsume said they have not laid off any worker or forced anybody to go on leave. He said that while others are in production, the remaining staff are undergoing training. The Sta. Rosa plant has 400 workers while Honda as a whole has 650 employees.

“What is important is that we keep on operating,” Natsume stressed.

He said another option is to cut their working days in half. They are now working six days a week. He said an option is to make it a three day work week but at the moment they are comfortable with their decision to simply cut the production.

For their completely built up units (CBUs), Natsume said that they have not encountered any problems so far. They source the parts from Thailand and Japan. However, he said they expect their CBU allocation to also be reduced by 50 percent.

Natsume said they were forced to cut production for April and May because the flow of raw materials from Japan has been erratic. He said the production situation in Japan is yet to normalize and they think this will happen no sooner than the end of the year.

Natsume said they have not received new shipment of microcomputers from Renesus, the company producing this microchip. He said all their vehicles are fitted with this microcomputer that is why their entire production is affected. Natsume said Renesus has completely stopped its production and will only resume operations in June.

He said they are now using up their inventory and they have decided to assemble a mere half of their normal production to make the supply last longer.

Philippine Star Online

Tsikot.com Philippines

Vehicle sales in the first four months rose 4.7 percent to 48,109 units from the previous year’s 45,910 units, but the full-year growth forecast of 4-5 percent will have to be revised due to the Japan crisis.

Documents from the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association showed that the industry had average sales of 12,027 units a month in the January-April period, still within the sector’s growth forecast for the year.

However, considering the impact of the Japan crisis on the auto industry and not only on the Japanese brands, Campi president Elizabeth Lee said the projected growth figure might not materialize and might have to be revised.

“Currently, we are still within the forecast range. However, this may be revised accordingly as we move forward in the coming months, with greater visibility on the extent of the damage and its lingering effect on local operations,” she said.

The March earthquake in Japan caused a tsunami that leveled villages, left thousands dead and hundreds of businesses crippled. The auto industry was one of those badly affected, considering the length of its supply chain and the need to deliver various parts and components to different parts of Japan and the world.

The local units of Japanese carmakers Toyota Motor Corp., Mitsubishi Motor Corp. and Honda Motor Co. Ltd. all implemented reduced production, by as much as 50 percent, and shortened workweeks. Even Ford Group Philippines cut production. These efforts were initiated to stretch existing key parts inventories while waiting for fresh deliveries from their Japanese suppliers.

“Although some key parts suppliers’ plants have resumed operations, they have yet to operate at normal levels. Hence, demand will continue to outpace supply temporarily, as plants try to ramp up operations to higher levels at the soonest time possible,” Lee said.

During the first four months, commercial vehicle sales inched up 2.8 percent to 31,815 units from the 30,948 units sold in the same period a year ago.

Passenger car sales, on the other hand, rose to 16,294 units from January to April, 8.9 percent better than the previous year’s 14,962 units.

In April alone, industry sales fell 4.5 percent to 11,816 units from the 12,374 units sold in the same month last year.

Toyota Motor Philippines Corp. continued to hold the first position with 18,440 units in sales in the first four months for a 38-percent share of the market. Second was Mitsubishi Motor Philippines Corp., which sold 10,945 vehicles in the same period, or a 23-percent share of the pie.
In a separate statement, Hyundai Auto Resources Inc. reported a 3-percent rise in sales for the January-April period to 6,419 units from the previous year’s 6,251 units. In April alone, sales rose 5 percent to 1,707 units from last year’s 1,679 units.

Philippine Daily Inquirer Business

Tsikot.com Philippines

Production at the local units of Japanese vehicle manufacturers Honda Motor Co. Ltd. and Toyota Motor Corp. will remain at 50 percent up to the end of the month—or even longer—as they try to stretch their existing parts inventories while waiting for supplier operations to normalize.

In a briefing Tuesday, Honda Cars Philippines Inc. president and general manager Tatsuya Natsume said the car maker’s Sta. Rosa plant would continue to assemble the City and Civic models, but at only half the capacity.

“The production situation has yet to normalize. There’s a fluidity in the parts supply situation, so we can’t really predict when production will go back to normal,” he told reporters.

He related that the most critical vehicle component that various car makers, not only Honda, were having problems with in terms of supply was the automotive microchip, being supplied mainly by Japan’s Renesas Electronics Corp.

The March 11 earthquake that hit the northern part of Japan damaged Renesas’ Naka plant. Renesas supplies as much as 40 percent of the global demand for automotive microchips.

Industry leader Toyota Motor Philippines Corp. (TMP) had likewise cut production by half and implemented a three-day workweek, just to stretch its parts inventory.

In a text message, TMP vice president Rommel Gutierrez said the adjusted operation schedule would last from April 25 to June 4.

Inquirer.net

Tsikot.com Philippines

Honda Cars Philippines Inc. (HCPI) announced yesterday will not implement any price increases despite the contraction in the supply of automobiles as a result of the twin disasters in Japan.

In a press conference, newly appointed HCPI president and general manager Katsuya Natsume said that they are not considering any price hikes. However, Natsume said they cannot say until when the prices will remain.

“Everything is unstable at the moment,” Natsume said. Aside from the shortness in supply, he noted that the price will be dependent on foreign exchange, prices of materials and oil.

As of the moment, HCPI’s plant is operating at 50 percent capacity. Before the crisis, they used to produce 45 to 50 units of City and Civic per day.

Even with the production cuts, Natsume said that they have not laid off any worker or forced anybody to go on leaves. He said that while others are in production, the remaining staff are undergoing training. The Sta Rosa plant has 400 workers while Honda as a whole has 650 employees.

“What is important is that we keep on operating,” Natsume stressed.

He said another option is to cut their working days in half. They are now working six days a week. He said an option is to make it a three-day work week but at the moment they are comfortable with their decision to simply cut their output.

Natsume explained that they have to cut their production for May because the supply of raw materials in Japan is still erratic. He said the production situation in Japan is yet to normalize and they think the earliest time possible that production will normalize is by the end of the year. “By the end of the year there is a high chance it will normalize,” Natsume said.

Natsume said they have not received new shipment of microcomputers from Renesus, the company producing a vital microchip for Honda cars. He said all their vehicles have this microcomputer that is why their entire production is affected. Natsume said Renesus has completely stopped its production and will only resume operations by June.

He said they are now using up their inventory of microchip and they have decided to assemble only half of the vehicles they normally produce in order to make the supply last longer.

Philippine Star Online

Tsikot.com Philippines

Japan’s Honda Motor Co. said Tuesday it was cutting April output by half at its Philippine assembly plant due to parts shortages caused by the massive March 11 earthquake and tsunami.

“HCPI (Honda Cars Philippines Inc.) is temporarily reducing 50% of its production volume from April 2011,” the Philippine unit said in a statement that cited reduced supplies of imported parts.

The subsidiary did not say how this would translate in terms of numbers of vehicles assembled.

“Honda will closely monitor the situation and strive to resume normal production operations the soonest,” it said.

Honda markets the Civic, Accord and CR-V models in the Philippines along with two sub-compact cars. As a whole, the Southeast Asian country had total vehicle sales of nearly 168,500 last year, according to industry data.

Honda is one of several carmakers to feel the ripple effects of Japan’s worst natural disaster in nearly a century, which has disrupted an array of industries worldwide.

ABS-CBN News

Tsikot.com Philippines