Honda shifts from local assembly to imports of City, Accord models

Honda Cars Philippines Inc. (HCPI) will shift from the local assembly of completely knocked-down (CKD) packs of the City and Accord models to the imports of their completely built-units (CBUs) from Thailand in a move to achieve greater efficiency and economies of scale, a company official said yesterday.

Arnel Doria, HCPI deputy head for marketing, told reporters during the press launch of the new City model yesterday that the decision to import the City and Accord is part of the overall regional plan to improve their operations.

He, however, assured that HCPI would continue the local assembly of the Civic and CR-V models as well as the manufacture of manual transmission for exports.

Doria explained that since HCPI has only one assembly plant, it would result in a downtime whenever it had to retool for each model. In the past, the company locally assembles the four models.

He said due to the low demand for the Accord, for example, HCPI has stopped its local assembly resulting in the slowdown in plant operations as the workers re-orient themselves to the assembly of only three different models.

The HCPI auto parts suppliers, Doria added, were likewise not achieving economies of scale as they had to supply low volumes for each different models.

With its new City model imported from Thailand, Doria said the suggested retail price would range from P550,000 to 669,000 based on the existing engine-based excise tax imposing a 15-percent tax on cars with an engine size of 1300 to 1599 cc.

But if government passes a new excise tax based on value, Doria said HCPI will have to recompute the City’s SRP. Under the proposed value-based excise tax, the City’s price tag would be subject to a lower excise tax rate of only three percent.

The Honda City was first introduced in 1996 and has not undergone any major change in design until this year.