Honda Automobile (Thailand) wants the government to allow tax-free imports of both parts and finished cars by local manufacturers to alleviate shortages.
Around the middle of October, Honda asked the Industry Ministry to consider waiving the import tax for auto parts and finished vehicles. The measure so far has not been approved, while the Thai automotive industry has been disrupted for almost a month. Major carmakers including Toyota, Nissan, Mazda and Isuzu have halted production mainly because of a shortage of parts due to the widespread flooding.
Honda is the only carmaker that has suspended production because its assembly plants have been flooded - its two plants are in Rojana Industrial Estate in Ayutthaya. But even though Toyota's three factories are still safe, they cannot operate normally. The disruption has affected Toyota's production worldwide, as Thailand is a manufacturing base for exported auto parts and vehicles.
Pitak Pruittisarikorn, executive vice president of Honda Automobile (Thailand), said that just as the import of goods such as drinking water, instant noodles and canned fish is necessary during the flood emergency, the import of auto parts and finished vehicles was very important to the Thai automotive industry and its employees.
"The supply chain in the automotive industry is very long and complicated. If auto-parts manufacturers and auto-makers cannot import products, the workers and dealers in this industry will be affected. You can see that other auto-makers currently cannot run their production lines either. The impact has also spread to other countries. This measure would not just help Honda, but the industry as a whole," he said.
Pitak could not assess how long automotive production would be disrupted, as the industry has no more idea than anyone else how long it will take for the flood waters to recede and the damage to be repaired.
He said Honda recently moved some of the vehicles it had parked at a warehouse in Don Mueang Airport and distributed them to dealers nationwide. That was done before the floods hit the airport, as the government asked Honda to move the cars so it could use the warehouse as the centre for distributing goods. The company had parked about 4,000 vehicles at the airport.
However, Honda has stopped distributing the vehicles to its dealers since Thursday, as the flooding on Vibhavadi Road has obstructed transport. Many hundreds of Honda's vehicles remain at the airport, but Pitak believes they will be safe from the flood waters, as the warehouse is more than 1.5 metres higher than the road level.
Pitak said the remaining vehicles would be enough to supply its customers for a month.
Honda has production capacity of 240,000 units per year, or 20,000 units per month. The company's
auto sales during the first nine months of this year were lower than expected because of the short-term disruption from the tsunami in Japan. Honda should post sales volume of 180,000 units for the first nine months of the year but sales right now are lower than they should be. It expects to accelerate its sales during the final three months of the year.
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