Honda, with a supply deficit of almost 250,000 units, plans to meet its need for new cars by making Turkey the core of its European operations, according to a local paper, which said that new plans and investments might emerge during the upcoming visit of CEO Takeo Fukuki to Istanbul.
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Honda’s Turkish plant has largely produced cars for the domestic market, there are plans to make Turkey its base in Europe, Hürriyet Daily said.
The paper quoted Honda chairman Takeo Fukuki as saying: “Despite the fact that is a European Union member, the United Kingdom is still not using the euro. Therefore our UK factory loses advantage in production. That factory will continue its production but we will not make any more investments on that facility. We decided to invest on a new facility in Turkey.”
Similar comments reported by a UK newspaper last month ‘perplexed’ Honda UK’s press and PR head Paul Ormond who told just-auto that Swindon was due to reach its full capacity of 250,000 cars (Civic hatchbacks and the CR-V SUV) in October and that further expansion on the 67-acre site – home to an engine plant and two car assembly plants – was not possible.
He added that Honda had invested GBP 1.5bn to date and that no further investment was planned.
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By GlobalDataOrmond said then that Swindon had “come of age” and was now a “mother plant”, helping with the development of Honda’s Turkish factory which currently builds Civic sedans for the domestic market.
Hürriyet Daily’s report, cited on an American website for expatriate Greeks, said that, with $100m investment, Honda’s Turkish factory would increase its production capacity from 30,000 to 50,000 units by October 2007.
Honda has more than 1m unit supply deficit in total, it cited Ümit Karaaslan, Honda Turkey’s assistant general manager as saying.
Karaaslan reportedly added that production capacity of the plant could increase to 100,000 by 2009. “Depending on the supply deficit in Europe we can always increase our production capacity. After reaching production capacity of 100,000 units we are planning to move our head office, motorcycle unit and replacement parts department to another building. We can then increase our production capacity to 140,000 units,” the paper quoted Karaaslan as saying.
After the capacity of Gebze factory has increased to 100,000 units, production of the second generation City will shift to Japan, but continue on sale in Turkey as an import, and a second model with a capacity of 100,000 units will replace the City.
“The details of this model will become clear at the end of the year. It might be Accord, or a brand new model,” Karaaslan reportedly told Hürriyet Daily.
Honda Turkey plans to produce 4,000 units a month soon, 2,500 of which will be exported. From October, the number of countries where Honda Turkey exports will increase to more than 10.
At present the firm exports the Civic sedan and City models to Slovakia, Hungary, the Czech Republic and Poland but from October it will also start exporting to Israel, Greece, Ukraine, Russia, Portugal and the Baltic states. In 2008, exports are expected also to the Middle East and North Africa.
The “mother plant” concept, also used by Toyota, links an overseas plant with a Japanese parent and the mother plant helps with staff training, the introduction of new models and any ongoing production problems as they arise.
Ormond said last month that engineers from Swindon now spend months at a time in Turkey, helping that plant move towards full automation, annual output of 100,000 units a year and exports to other markets.
Euro comments ‘perplex’ Honda UK
