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Thai business as usual for Honda

Multi-cultural: Honda's petrol CR-V is sourced from Thailand, while its diesel twin is built in the United Kingdom at its Swindon plant.

Honda Australia unfazed by powder keg Thailand – source of 70 per cent of its cars

14 May 2014

HONDA Australia says it has no concerns about the potential for disruption of its car supply by political unrest in Thailand.

The South East Asian kingdom, which has been racked by protests and sometimes violent confrontations in recent times, supplies about 70 per cent of all Honda vehicles sold in Australia, including most of its top sellers such as the Civic sedan, mid-sized Accord and CR-V petrol.

The supply of Thai-built cars was crippled by floods in 2011 when Honda’s Ayutthaya plant outside Bangkok was devastated, requiring months of rebuilding.

Honda was one of the worst affected car companies by the floods, which also dented production of Thai-built cars for others brands, including Toyota, Mazda and Ford.

Honda Australia director Stephen Collins said at this week’s Honda City media launch that he was not worried about a repeat of stock supply interruptions, this time due to the unstable political situation.

“It is something we think about but we are not concerned about it,” he said.

“We have seen over the last number of months where there has been some political unrest but we have seen really no issues in our supply chain.

“Now probably 70 per cent of our volume would come out of Thailand, and it has been that for a couple of years now. Apart from natural disaster issues we haven’t seen any dramas so we are not that worried about that.”

Mr Collins said Honda was still seen as a premium Japanese offering in Australia despite a gradual shift in product sourcing from its home market to Thailand and the addition of cheaper models such as the City.

He said Honda still had a strong reputation in Australia, thanks to a long history of quality products.

“I think we have got a reputation, and our research shows that our reputation for quality and also for fun-to-drive vehicles is right up there,” he said. “I don't think we are arrogant about it and I don't think we take it for granted.

“I think we have a very strong DNA that is well and truly embedded in lots of history, but I think it is all about what you are doing now and what you are doing in the future as well.

“So we don't take it for granted, but we are still premium but we have got to be good value for money. I think that's key.”

Mr Collins said that although he would love to see a light truck in the Australian Honda range at some, point none was in sight.

The United States-market Ridgeline utility is only produced in left-hand drive, which rules out the Australian market, and while Mr Collins said there were no plans for right-hand drive production, he would be keen to look at a Honda ute if it eventuated.

“If something was to become available in right-hand drive in the future, clearly there would be an opportunity and we would seek that out,” he said.

“There is nothing on the horizon. But if there was, we all know the LCV market here is big and it would be an obvious area we would want to investigate. I can't see it at this point in time.”

Another vehicle that will likely be sourced from Thailand is the reborn HR-V sub-compact crossover that will arrive in Australian showrooms in January next year.

The Jazz-based SUV was originally thought to take the Japanese market Vezel nameplate in Australia, but Honda Australia has elected to follow Honda America's lead in taking the HR-V name instead.

The original HR-V sold in middling numbers between 1999 and 2002, but despite the relatively low sales volumes and short time on the market, Mr Collins said there was some love for the nameplate in Australia.

“I think there is equity in the HR-V name,” he said “We just thought that it made sense in terms of our SUV line-up so we were happy to take that option. We sold about 5500 HR-Vs so it was reasonable volume and a bit of a quirky car at the time.

“It was probably one of the first small SUVs. So we just thought all those things added up and made sense, so we are pretty happy with that.”

Mr Collins told GoAuto in January this year that the new entry-level SUV will become a core model for the company in Australia alongside the Jazz and Civic.

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