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Honda to suspend vehicle production at Thailand plant due to intense competition

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Honda to halt vehicle production at Thai auto plant amid aggressive competition

Honda Motor announced on Tuesday that it will cease vehicle production at its factory in Ayutthaya province, Thailand, by 2025. The Japanese automaker plans to consolidate its output at the Prachinburi plant in response to tough competition from Chinese brands and increasing demand for electric vehicles in the region.

The decision to close the Ayutthaya plant, which was first opened in 1996, comes as Honda faces challenges from aggressive Chinese counterparts in Southeast Asia. The company will shift its focus to producing car parts at the facility once vehicle production ceases next year.

Honda spokesperson mentioned that the Prachinburi plant, which opened in 2016, will become the sole location for vehicle production in Thailand. The consolidation aims to address the decline in combined production at both plants, from 228,000 vehicles in 2019 to under 150,000 annually in recent years.

Despite the changes in Thailand, Honda has no immediate plans for new investments in the country. The automaker has been exporting vehicles from Thailand to markets like Indonesia and the Philippines but is facing stiff competition from Chinese brands offering affordable electric vehicles and plug-in hybrids.

Japanese automakers, including Honda and Nissan, are at risk of losing market share in Southeast Asia to Chinese competitors. Chinese EV makers have been ramping up investments in the region, posing a challenge to established Japanese brands. The move by Honda reflects the shifting dynamics in the global automotive industry, with Chinese manufacturers making significant inroads into markets traditionally dominated by Japanese companies.

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