Honda to close Japanese plants as focus shifts to EVs

Honda is taking the rare step of closing one of its Japanese plants, as the car maker shifts its focus toward EVs. Reuters reports that the company will end production at its Sayama plant by 2022. The move will cut domestic capacity by around 24 per cent. The automaker has seen stagnant domestic sales and said on Wednesday it was streamlining its Japanese operations as it takes a nimbler approach to development and manufacturing in the face of fierce competition from carmakers and technology companies to make EVs and self-driving cars. “As we focus more on adopting electrification and other new technologies, we want to hone our vehicle manufacturing expertise in Japan and expand it globally,” CEO Takahiro Hachigo told a press conference. Honda said it would end production at the ageing plant north of Tokyo, consolidating output at its Yorii plant in the same area by the end of the 2022 financial year. Most workers currently at Sayama would be transferred to the Yorii facility. “Domestic sales haven’t increased as much as we were expecting and it has become difficult to boost exports,” Hachigo said. The move would cut overall domestic annual production capacity to around 810,000 units, the same as Honda’s current output levels, which are around 76 per cent of its current production capacity of 1.06 million vehicles. Following the closure, Honda said the Yorii plant will produce EVs and serve as a major center for developing manufacturing technology for electric cars. While the car maker makes cuts in Japan, it plans to open a new plant by 2019 in China, where it has seen massive growth. Overall, global annual production would remain largely unchanged at around 5.06 million units, Honda said. Honda is complying with a request from Japan’s transport ministry for inspection records after Nissan said on Monday it would recall 1.2 million vehicles due failing audits of their final inspection processes.