One indicator that a country at the barest minimum has made significant inroads towards industrialization is the presence of large-scale assembly infrastructure, be it for locally-originating products or locally-manufactured stuff of foreign branding. On that note, the Philippines had the good fortune in decades past to be home to car assembly plants by major international brands such as Honda. Their assembly facility is located at Sta. Rosa, Laguna. It ought to be a point of pride that the Philippines can make its own Honda vehicles. But owing to current economic circumstances, that Laguna Honda plant will be closing its doors.
Inquirer.net reports that Honda Philippines announced this past Saturday, February 22, that their Sta. Rosa assembly plant is being shut down. The plant’s local assembly workers, around 380 in all, will soon be out on their ear by March 25, or so. That means just over a month for the factory employees to begin planning for life after Honda, though it would be difficult. As Honda Cars Philippines Inc. spokesman Louie Soriano puts it, the announcement from the company’s Japan HQ took everyone by surprise, even as they are fully aware of the reasons why the plant closure is necessary.
One reason for Honda Philippines to close assembly in the country was due to the facility’s low production capability to begin with – just 15,000 units annually compared to say, over hundreds of thousands in a major nation like the UK. Even then, the actual amount being manufactured at the plant is even lower at roughly 8,000 units only, back in 2019. One attributed reason for the slump was “market demand,” due to less interest in buying cars due to hiked excise taxes on foreign-branded vehicles due to factors like the TRAIN law from President Duterte. Seeing Honda Philippines sales go down by 26.7% and 13% from 2018 to 2019 stings.
But there is also the global trend to consider. Even without higher excises stifling market demand, drivers in many countries are shifting from gas-powered cars to e-vehicles, of which the Laguna assembly plant is not capable of manufacturing yet. Following the final shutdown in March, the Sta. Rosa facility with churned out certain best-selling Honda models like the City and BR-V will be a prime acquisition target by several interested local automakers, though DTI Secretary Ramon Lopez declined to elaborate.
Image courtesy of Daily Tribune
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