Flood hits Honda’s Thai plant UPDATED

[Monseratto]

Flood hits Honda’s Thai plant UPDATED | Motorindustry.org

Summary :
•Production suspended for a week because of supplies disruption.
•Capital of Bangkok safe for now but government warns of impending flood.

The flood situation in Thailand is becoming a national emergency, with the Thai army now involved in flood mitigation as well as evacuation and rescue operations. According to the Thai Disaster Relief Centre says, as of today (Sunday) 30 provinces are affected, with 261 dead and 4 missing.

In the ancient city of Ayutthaya, a six-metre-high earth-filled protective was overcame by overflowing water from the Khao Mao canal, flooding the Rojana Industrial Park. One of the plants located there is Honda Automobile (Thailand). According to a report by Bangkok Post, Rojana Induastrial estate is now under 5.1 meter of water. Honda has since announced that the plant will be shutdown for a week.

Honda also has another plant in Ayutthaya, Asian Parts Manufacturing Co., Ltd. which makes stamped automotive steel panels, but we have not heard any reports on the status of this plant.

Honda Automobile (Thailand) produces Accord, Civic, CR-V, Jazz, City, Brio for the domestic Thai market as well as exports to Asia-Ocenia region (excluding China). It also plays the role of a “leader plant” for the Asia-Pacific region (except for China). Honda says it has shifted 3,000 finished cars from the industrial estate to other locations.

Like the experience of this year’s Japan earthquake that rocked the global car industry, the industry’s supply chain structure and the Just-In-Time method adopted meant that localized disruptions can have regional-global implications. Honda Automobiles (Thailand) only suffered minimal damage (earlier) but production had to be suspended because plants of three automotive parts manufacturer in the neighbouring Saha Rattana Nakorn Industrial Estate supplying to Honda have been flooded.

The main highway leading in and out of Ayutthaya is now impassable. The logistics and transport industry is also facing problems shipping finished goods between plants and shipping ports as some key railway and highway networks are now submerged.

As of today, Honda is the only car company that appears to be affected. But we won’t be surprised if more announcements from other car makers are made later this week.

[Monseratto]

Honda Cars Ph faces new supply challenge as flood hits Thailand - News | TopGear.com.ph

Honda Cars Ph faces new supply challenge as flood hits Thailand

The local operations of Honda is facing another supply challenge as flood hits Honda Automobile (Thailand) Co. Ltd. (HATC) in Ayutthaya--the source of Honda Cars Philippines' (HCPI) stock of Jazz, CR-V and Accord.

HATC suspended operations from October 4 to 8 as intermittent rain since July has caused flooding in central and northern Thailand. As flood has entered the HATC plant's property on October 10, the suspension of operations continues.

"Honda would like to express its deepest sympathy and condolences to the victims of the flood in central and northern Thailand, and our sincere hopes for the earliest possible relief and recovery of the affected areas," the company said in a statement. "Honda will continue providing updated information on our future outlook while exerting a company-wide effort to normalize our production as soon as possible.


Honda said its Thai assembly plant in the city of Ayutthaya, which has been severely affected by flooding, had suffered water damage. The plant, which has been closed since October 4, produces 240,000 automobiles a year, about 5 per cent of Honda’s global output.

“We think resuming production will take some time,” Masataka Kunugimoto, an analyst at Nomura, said in a report. A three-month shutdown that reduced Honda’s production by 60,000 vehicles could cost the company Y25bn ($326m) in operating profits, he estimated.


Honda has also asked for its customers' understanding as the company sorts out ways to solve the problem it is currently facing.

In the Philippines, HCPI said it is "currently assessing the situation and its possible impact on its local operation."

"Honda is working diligently to overcome this temporary interruption and minimize the impact on Honda customers, dealers and associates," HCPI said in a statement.

Honda Cars Philippines has barely recovered from the Japan disaster in March, which also affected the company's supply of vehicles in the Philippines.

As it apologized for the lack of supply after the tsunami and earthquake that soaked and shook Japan, Honda Cars Philippines has issued a similar statement following the flood in Thailand.

"We apologize for any inconvenience that might have caused our dear customers and thank everyone for their patience as we manage this challenging situation," HCPI said.

[jazzinmypants]

will this affect our local honda supply?

[Monseratto]

Obviously Honda Philippines gets it Accord, CRV and Jazz models from Thailand. So there may be a acute supply problem. Civic and City may suffer some problems too since some parts used/components for Philippine assembly are sourced from Thailand.

The impact of Thailand's floods is being felt around the world, too, underscoring the country's growing importance as a supplier of auto parts, cameras and computer components.

Honda Motor Co. said it is mulling whether to send parts from Japan to help re-start production at its automobile and motorcycle plants in Thailand after a factory and several plants run by key suppliers were swamped at the weekend. The company said it is shutting down production in Thailand until the end of the week at least.

A spokesman for the company in Tokyo said the Japanese auto maker is also considering substituting parts normally sent from Thai plants to India with components supplied from Japan and elsewhere. He said Thai-made parts are only a portion of the 10% to 20% of parts imported to supply production in India. A Honda spokeswoman in India, meanwhile, said the company has enough stock of Thai-made components to last until the end of October.

Mr. Aiyer at McKinsey said the decision to re-route supplies from Japan was likely a result of earlier contingency planning exercises. "This cross-border supply chain dependency on critical components and parts needs to carefully considered" before a crisis hits, he said. Mr. Aiyer said there also are signs that companies affected by the floods are quickly shifting suppliers and moving inventory to safe locations.

Hajime Yamamoto, Thailand director for Colorado-based research company IHS Automotive, meanwhile, said the flooding crisis will encourage manufacturers to search out a broader range of suppliers. They need to "avoid putting all their balls in one basket," he said.

While some major automobile manufacturers including General Motors Inc. and Nissan Motor Co. are still operating normally in Thailand, other big auto makers such as Toyota Motor Co. and Ford Motor Co. suspended production at their Thailand plants even though they weren't directly affected by the flooding. Ford said it would resume production of passenger cars on Thursday while leaving pickup truck output halted. Many parts suppliers are clustered in the Rojana Industrial Park, some 67 kilometers north of Bangkok. The industrial park and other nearby facilities were swamped by fast-moving floodwaters when an embankment collapsed Sunday.

[jazzinmypants]

Oh.. I thought we assemble our vehicles locally and the parts come from Japan.

[rmsoriano]

will this affect our local honda supply?

Definitely, it will delay the release of 2012, facelifted Honda City.... More Patience pa ang kailangan...

[ram_dlsu]

there will definitely be a delay again.... another potential problem will be ... is your new Honda Jazz , CRV or Accord a flooded unit?

[Philip0021]

malas lahat ng 2012 models ng honda.. lalo na 2012 jazz mmc.. haha

[tidus1203]

More opportunities now for the likes of Hyundai and Ford...

[rmsoriano]

Definitely, it will delay the release of 2012, facelifted Honda City.... More Patience pa ang kailangan...

there will definitely be a delay again.... another potential problem will be ... is your new Honda Jazz , CRV or Accord a flooded unit?

I think I have to re-evaluate, baka flooded unit pa ang makuha ko, hahaha,,,,,, pwede kaya 1.6 Elantra..