The Philippine unit of Honda Motor stated on Saturday its production facility will close next month, as the Japanese automaker continues to have a hard time to support global automobile operations.
The automaker has seen decline in its profitability by more than half in the past two years, led by a range of quality-related issues.
In a statement, Honda Cars Philippines Inc said its production plant south of the capital Manila will stop operations next month. But automobile sales and after-sales services will continue through Honda’s local 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 stated.
Production will concentrate on other hubs in Asia and Oceania, statement included.
Honda Philippines’ manufacturing plant, which has 650 workers and associates, started operations in 1992. It makes BR-V and City passenger cars catering to regional demand.
The automaker counts Rizal Commercial Banking Corp and a unit of conglomerate Ayala Corp as its regional partners.
The Philippines’ automotive output is a minnow compared with its Southeast Asian peers, Thailand in general. A government tax incentive program started in 2015 has failed to significantly increase the country’s local auto production.