Honda now built in Bangkok

It's the hub of the newest car making empire in the world and one that supplies a growing number of cars to Australia with a variety of badges including Honda.  This year alone the number of Thai-built vehicles sold in Australia is 96,603 by the end of July, up from 82,656 in 2009.

Honda Australia was the first company to import passenger cars from Thailand, back in 1998, but it has taken another 12 years for the Japanese brand to feel secure enough about Thai-built quality to boast about the products.

So this week Carsguide is part of a visit to Bangkok and Honda's factory at Ayutthaya, 80 kilometres north of the capital, to investigate the cars and quality.  Honda Australia boss Satoshi Matsuzawa says there has “never been any resistance" to the company's cars being built in Thailand because "it’s built by Honda”.

But about 80 per cent of Honda vehicles sold in Australia are now made in Thailand.  They are the City, Jazz, Civic sedan, CR-V and Accord. The Civic hatch is made in the UK and the Accord Euro, Legend and Odyssey are still made in Japan.

Honda is not alone and company spokesman Mark Higgins says “more and more manufacturers are coming here to build cars”.  They include most pick-up trucks sold in Australia, the Mazda2 and - very soon - more small cars Ford led by the next Fiesta, as well as Suzuki.

The Thai-Honda story begins in 1998 with 778 vehicles.  In 2005, the Free Trade Agreement between Australia and Thailand and the shift of Jazz production from Japan to Bangkok dramatically increased the exports to 14,071.

In 2007, Thai’s Honda exports to Australia tally 51,424, before dropping substantially during the global financial crisis. This year they are expected to reach 40,197.  But that number is still only a tiny proportion of the total 240,000 annual capacity of the Thai Honda factory.

The plant occupies 851,800 square metres and employs about 5000 Thai staff and 80 Japanese managers. They work two to three shifts a day with two weeks’ holiday a year and free meals provided by Honda.

But working conditions are not idyllic with Thailand’s oppressively hot and humid climate mitigated in the body and frame plant by opening up a whole wall to prevailing winds instead of using airconditioning in an effort to save electricity.

Honda Automotive Thailand Corporation's vice-president, Makoto Morii, says the plant is 50 per cent automated, compared with Japanese factories at 90 per cent automation.  “We use more hand welding because the salary is lower here. Instead of investing in expensive machinery, we can hire more people here," he says.

He also defends the level of human involvement and rates his Thai workers highly.  “In terms of mechanical skill, the Thais and Japanese are of the same skill level. Humans can be more flexible than a robot,” he says.

However, he admits that for the plant to take on production of more complex hybrid vehicles, it will require full automation.  “The factory would have to grow, but we don’t have that plan,” he admits.