Honda to stop production at Sayama plant in Japan

Walking towards its said path to retool its manufacturing operations to have its entire lineup converted into EV by 2040, Honda has already cut its domestic auto production capability to slightly over 800,000 vehicles a year, down by around 40% from the 2002 peak.

Last year, the brand even announced taking up some more cost-cutting steps, including halting production of finished cars at its plant in Sayama, Saitama Prefecture. On Dec. 27 last year, the company even arranged a "line-off ceremony" at the Sayama plant where President Toshihiro Mibe stated, "like you, I will miss it all," to those present. 

Although only executives were allowed to attend, the event's live stream was made available for all. Therefore taking advantage of the situation, Mibe showed up to the state, "we will continue making automobiles that meet the needs of consumers at home and abroad."

The Sayama plant was said to be the mother factor, set up back in 1964, it rolled out cars that defined the brand. Though the factory would be functioning as of now, making parts, it is set to close within a year or two, transferring all its operation to the Yorii plant, also in Saitama, with a motive to lower fixed costs and raise operating rates. 

"Ending production of finished cars at the Sayama plant could leave Honda with much smaller domestic capacity to manufacture such midsize or large vehicles as the Accord and the Odyssey, which used to be made at the plant," said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute.

Considering the importance of US and Chinese markets in Honda's global sales, the automaker has planned to phase out their production of EVs by 2040 to ensure they make the most out of it. 

Though switching over is likely to impact the company's finances as the global capacity is projected to fall. But with the anticipation of a smoother way in the second phase, it is likely to be termed a still more cost-cutting and efficient layover.

Source: Nikkei

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