Honda originally announced that it would convert to electric vehicles (EVs) manufacturer by 2040, however this transition will be difficult without major reorganization to prepare for an all-electric future.
According to Nikkei, it will terminate the production of finished automobiles at its Sayama factory in Saitama Prefecture with a line-off ceremony in December 2021.
The decision is part of the company’s cost-cutting efforts, which include the introduction of a new car development system and the discontinuation of the company’s Formula One racing program, which were announced last year.
The Sayama plant opened in 1964 and has since produced classic Honda vehicles such as the Accord and Civic. Until December, it also made the Step WGN, the Odyssey, the Legend, and the defunct Jade and Clarity.
It produced 250,000 cars every year, adding to the country’s annual production capacity of roughly one million vehicles. This covers production at the Yorii and Suzuka facilities in Saitama Prefecture and Mie Prefecture, respectively.
“Like you, I will miss it all,” Honda’s President and CEO, Toshihiro Mibe, remarked at the event, and added that the company “will continue to create cars that meet the needs of consumers at home and abroad”.
The Sayama facility, on the other hand, will continue to produce vehicle parts until it is totally shut down in two to three years. Many of Sayama’s employees will be rehired at the Yorii facility, which will take over its operations.
Following the restructuring, Honda’s domestic capacity has dropped to 800,000 vehicles per year from its current Yorii, Suzuka, and Honda Auto Body (Mie Prefecture) facilities. The figure is about 40% lower than in the early 2000s, when the automaker was able to produce more over 1.3 million automobiles each year.
Given the importance of the Chinese and American markets, which are lagging behind electric vehicles (EVs), the change of Honda’s production locations to pursue its electrification ambition is critical. The Honda e, the company’s first mass-market electric car, was constructed in the Yorii facility, and Honda plans to build EV-specific plants in China and the United States.
Because global capacity is scheduled to reduce from 5.59 million cars in fiscal year 2020 to 5.14 million cars in fiscal year 2021, this shift is expected to have a financial impact on the company (ending 31 March 2022).
The suspension of operations in the United Kingdom and Turkey, as well as other obstacles such as the pandemic and semiconductor chip scarcity, will have an impact on the final total.
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