Honda has formulated the land of Thailand, instead of India, as its car hub for Asia and partial Europe, said the company’s CEO. However, the small car production will see a new perspective by the end of 2011with Thailand all set to be the company’s key sector for exports to the ASEAN countries and segments of Europe. Already, the second plant is still on the air in Thailand for a year where the capacity is not largely used due to the downfall in the market globally.
Once the improvements come in handy, the Thailand plant will be geared up for 100% production, he said. Similarly, in India, the company has set up its second plant in Rajasthan with more powerful production intended than the first plant at Greater Noida. Another factor that went against India in this regard is the AFTA (ASEAN Free Trade Area) agreement. This relaxed the tariff barriers among ten countries in the region. This made Honda to capitalize on the cost-factor to meet the demands in Asia and partial Europe. But the net focus will be on Indian domestic car market which is ever potential for small car.
By 2011, Honda will have different marketing strategies for India and Thailand markets, regarding small car, meeting the eco policy, said the official. By this policy, the car made in Thailand will be mandated to provide 20km/lit for eligible to claim tax relief. Honda, then, has to employ less steel and even plastic. In Thailand, the initial quantity will be 40000 to be upgraded to 100000 units earmarked for export largely in the ASEAN region. But the Indian production will be much more as the prospects indicate the future market for China and Brazil. This is due to the downfall in Japan market while the US and Europe still on the revamping process.