Honda to spend $650mn to overhaul Thailand plant

Honda Motor Company will completely overhaul its flood-hit factory in Thailand in a project that could cost more than 50 billion yen ($650 million), says a report in the Nikkei business daily that has been quoted by Automotive News. The plant was submerged in Thailand’s worst floods in half a century. The carmaker has already started replacing equipment with the aim of resuming output in April, the Nikkei said. Refurbishing the flood-hit factory will almost be the equivalent of building a plant from scratch, the Nikkei report suggested.

Honda’s India operations have been hugely affected by the shut down of the Thailand plant. The plant supplies critical parts for the City, Brio and Jazz, all models whose sales were impacted in December 2011. Honda was able to sell just 31 Brios and 600 Citys. Honda has said the company will re-start production in February as supplies get normalized. The sourcing of critical parts has been shifted from Thailand to China and Japan. The backlog for the Brio is in the region of 7,000 units.