Honda’s Philippine unit to close auto production plant

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MANILA (Reuters) — The Philippine unit of Honda Motor Co. Ltd. said on Saturday its production facility will shut down next month, as the Japanese automaker struggles to shore up global automobile operations.

Japan’s third-largest automaker has seen its profitability decline by more than half in the past two years, led by a series of quality-related issues.

In a statement, Honda Cars Philippines Inc. said its production plant south of the capital Manila will cease operations next month. But automobile sales and after-sales services will continue through Honda’s regional network.

“To meet Honda’s customer needs in the Philippines for reasonably priced and good quality products, Honda considered efficient allocation and distribution of resources,” the company said.

Production will focus on other hubs in Asia and Oceania, it added.

Honda Philippines’ manufacturing plant, which has 650 employees and associates, started operations in 1992. It makes BR-V and City passenger cars catering to local demand.

Honda Philippines counts Rizal Commercial Banking Corp. and a unit of conglomerate Ayala Corp. as its local partners.

The Philippines’ automotive output is a minnow compared with its Southeast Asian peers, notably Thailand. A government tax incentive program launched in 2015 has failed to significantly raise the country’s local auto production.

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