Honda Motor said on Tuesday (31 January) its car factory in Thailand (in the Rojana Industrial Park, Ayutthaya) would resume production by the end of March.
The plant was completely flooded last October in the worst annual floods in the country for 50 years. A large number of completed cars was also wrecked though employees reportedly saved some by parking them on elevated roads near the site.
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Honda has now completed flood water drainage and cleaning at the plant which began at the end of November 2011.
The automaker also said production operations in neighboring Asian counties, which suspended or made production adjustments due to the disruption in parts supply from Thailand, have resumed output which is expected to be ‘normalised’ by April.
Honda said it plans to take some additional flood control measures including conducting stationary measurement of water levels and working with Rojana Industrial Park to build water protection walls around the plant.
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The automaker will also “make requests to Thai governments and the industrial park as needed to prevent the risk of flooding in the future”.
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By GlobalDataIt will also work with suppliers to avoid such risks in the future.
Reuters reported the company had imported Jazz and Accord models from Japan to replace production from the Ayutthaya assembly plant. These vehicles will be delivered to customers from the end of February.
The news agency said Honda scrapped 1,055 cars that were damaged by the flood. The program, begun on 27 December, is on schedule to be completed by 25 February.
In Tokyo, chief financial officer Fumihiko Ike told Reuters Honda estimates the floods will cut its global shipments by 260,000 cars in the financial year ending 31 March.
Earlier on Tuesday, Honda said its net income for the fiscal third quarter ended 31 December, 2011 fell 41.2% to JPY47.6bn on sales off 8% to JPY1,942.5bn ($24,988m) “due primarily to decreased revenue in the automobile business due to the supply chain disruption mainly caused by Thailand flood and unfavourable foreign currency translation effects, despite increased revenue in the motorcycle business”.
Operating income fell 64.7% to JPY44.2bn ($570m) which the automaker said was “due primarily to a decrease in sales volume and model mix, an increase in fixed costs per unit as production volume decreased, the impact of raw material price increases and the unfavuorable foreign currency effect.”
in its financial statement Honda said it had booked JPY17.35bn of costs and expenses as a result of the Thai floods. It had said recently it would rebuild the factory but would effectively have to re-equip the entire plant as if it was a new building.
Inventory loss was JPY7.33bn and the loss on damaged property, plant and equipment was JPY7,66bn.
Honda noted insurance has so far covered JPY11.83bn of those losses with further adjustments to come “when final settlements with insurance companies are reached”.
