Honda Cut Japanese Production by 24 Percent in Shift to EVs

Oct. 6, 2017
Honda plans to end production at its Sayama plant in Japan by 2022, cutting domestic capacity by around 24 percent as it shifts focus to electric cars (EVs) and other new technologies.

Oct. 6, 2017—Honda plans to end production at its Sayama plant in Japan by 2022, cutting domestic capacity by around 24 percent as it shifts focus to electric cars (EVs) and other new technologies, according to Reuters.

The automaker has seen stagnant domestic sales and said on Wednesday it was streamlining its Japanese operations as it takes a more nimble approach to development and manufacturing in the face of fierce competition from carmakers and technology companies to make EVs and self-driving cars.

“As we focus more on adopting electrification and other new technologies, we want to hone our vehicle manufacturing expertise in Japan and expand it globally,” CEO Takahiro Hachigo told a press conference.

Hachigo has been trying to revive a culture of innovation at Japan’s No. 3 automaker, after a number of major product recalls in recent years as well as lackluster product offerings, partly because it focused so much on increasing volumes and profit.

Honda said it would end production at the ageing Sayama plant in Saitama Prefecture north of Tokyo, consolidating output at its Yorii plant in the same prefecture by the end of the 2022 financial year. Most workers currently at Sayama would be transferred to the Yorii facility, it said.

The move would cut overall domestic annual production capacity to around 810,000 units, the same as Honda’s current output levels, which are around 76 percent of its current production capacity of 1.06 million vehicles.

“Domestic sales haven’t increased as much as we were expecting and it has become difficult to boost exports,” Hachigo said.

Following consolidation, Honda said the Yorii plant will produce EVs and serve as a major center for developing manufacturing technology for electric cars. It will also produce other vehicles including larger-sized global models.

While the automaker cuts capacity at home, it plans to open a new plant by 2019 in China, where it has seen explosive growth. Overall, global annual production would remain largely unchanged at around 5.06 million units, it said.

Honda has struggled to expand sales at home in the past few years, facing stiff competition from popular offerings including Toyota’s Prius gasoline hybrid and Nissan's Note compact hatchback.

In the year ended March, it sold 668,000 units domestically, almost the same as in the previous year.

With an annual production capacity of 250,000 units, the Sayama plant opened in 1964 and is one of Honda’s oldest plants, producing the Accord sedan, the CR-V SUV crossover and other models.

Sponsored Recommendations

How one auto shop was able to order 20% more parts

Learn how one auto shop talks about the benefit of using PartsTech in their shop.

Vehicle Inspection Checklist For Auto Shops

Vehicle inspections, whether digital or on paper, are crucial for auto shops, ensuring thorough assessments and fostering trust by transparently revealing a vehicle's condition...

6 Reasons Why A Digital Vehicle Inspection Is A Must-Have

In an era of growing technology and innovation, auto repair shops must keep pace with the latest advancements to meet customers preferences and remain competitive.

How Your Auto Shop Can Now Connect To 30 Tire Suppliers For Free

Yep! We have over 50 tire suppliers in our network. And PartsTech is the only platform where you can access more than 30 of those suppliers FREE OF CHARGE.