Honda invests P42M for local production of City

Honda Cars Philippines, Inc. (HCPI) has invested an additional P42 million in its Sta. Rosa, Laguna plant to resume local production of its compact car the City.

This was disclosed yesterday by Mitsunari Takano, president and general manager of HCPI.

Honda decided to resume production of its City model after transferring production to Thailand last year to be able to concentrate producton on Honda’s then bestseller the CRV.

Honda thus was importing the City model, along with its mid-range car model the Accord, from Thailand.

However, with the decline in the CRV’s sales, and the pick-up in City sales, Honda decided to resume the local production of the City.

Takano said that with the introduction of the 1.5 liter variant of the City, sales of the compact car sedan would increase further.

Takano said that HCPI is projecting sales of 400 units a month of the City model, particularly the more muscled 1.5 liter variant.

While local production of the City is intended mainly for domestic sales, Takano indicated the possibility that HCPI may in the future export a locally assembled vehicle.

"We are studying (exporting), not City model, but we have dream in the future. But not as of this moment. We are still investigating," Takano said.

The 1.5 liter VTEC City variants is being priced at P619,000 for the manual transmission; P659,000 for the CVT variant; P659,000 for the MT but with ABS and SRS and P699,000 for the CVT variant with ABS and SRS.

Passenger cars are now cheaper following the implementation of the new excise tax system which now taxes Asian utility vehicles (AUVs) and shifts the tax burden to SUVs and luxury cars, causing the drop in demand for the CRV.

HCPI, thus, deemed it more practical to resume production of the City in tandem with its continuing production of the CR-V and the Civic model.

With the decision to resume local production of the City, only the Accord model would continue to be imported from Thailand.