Output cuts to trim Honda production by 40%

HONDA will reduce production at two of its Japanese plants by up to 40 per cent for the remainder of September. The news comes as ongoing supply chain and logistical problems plague the vehicle manufacturing industry, Honda joining Toyota in significantly reducing its domestic manufacturing capacity.

According to a report published by Reuters this week, the reduction could be seen as a warning to other manufactures that they may not be able to return to production capacity before the end of the financial year, further impacting the ability to catch up on production shortfalls caused by the persistent shortage of microprocessors and other parts caused in part by the COVID-19 pandemic.

Honda’s assembly plant in the Saitama prefecture north of Tokyo will cut output by approximately 40 per cent this month, affecting supplies of models including the Civic, CR-V, and Honda e, according to the manufacturer’s website.

Further, two lines at its Suzuka facility in western Japan – responsible for building Jazz and HR-V models – will cut production by around 20 per cent.

Honda said delays in receiving parts and associated logistical issues, as well as outbreaks of COVID-19 and semiconductor shortages, were behind the decision to slash production.

The Japanese marque reported domestic January to July production figures of 373,833 units – a year-on-year reduction of 1.6 per cent – and global production figures of 1,883,354 units – a year-on-year reduction of 9.4 per cent – in its Production, Sales and Export report published on August 30.

Exports from Japan totalled 45,725 units for the January to July period, with the majority (36,081) shipped to Europe. North America received 601 Japanese-made Hondas, while greater Asia received 1386 units. The remaining 7657 units were delivered to other markets, including Australia.

Honda’s domestic sales show the brand continues to decline, with mini-vehicles now in their 12 month of sales decline.

New vehicle registrations for the brand are down for their third consecutive month, while total sales in Japan face their second decrease in as many months. Honda reported a total of 341,227 new vehicle registrations in Japan for the January to July period, down 7.4 per cent on the same period in 2021.

Elsewhere, Honda’s North American production is down 17.2 per cent to 667,803 units, with US production down 15.4 per cent to 451,515 units.

Conversely, Honda showed an increase in production in other Asian facilities, including China.

Overall, the manufacture’s Asian manufacturing network (excluding Japan) has produced 1,175,451 units to the end of July this year, a 2.3 per cent increase over the same period in 2021.