HONDA Motor Co. is considering relocating part of its motorcycle production in Vietnam back home as Japan’s domestic manufacturing costs have fallen over the weak yen, a representative with its Vietnamese unit has said.
The production and assembly lines of motorbikes with under 50cc engines could be relocated to Kumamoto Prefecture this year, the Vietnam News Agency reported, quoting a Honda Vietnam source close to the discussions.
It was reported earlier this year that the production lines will be transferred back to Japan to meet domestic demand.
Honda’s annual motorcycle sales in the Japanese market are around 200,000 units, half of which are those with under 50cc engines.
With production costs in Japan soaring, the company previously had to move part of its production to Vietnam to save costs.
But it is now costlier to import made-in-Vietnam motorbikes than make them domestically, and Honda is thus likely to reverse its decision.
Millions of Honda two-wheelers, such as the Dunk scooters, will be manufactured in Japan instead of Vietnam if the decision is officially enacted.
Honda Vietnam was expected to ship 25,000 50cc Dunk scooters to Japan annually, with the first batch of units exported in January last year.
The Vietnam subsidiary is currently exporting more than 100,000 Honda motorcycles, including the SH, SH Mode, PCX, and Lead, to the US, the EU, Africa, and many Asian countries.
The continual weak-yen trend is creating advantages for Japanese manufacturers, especially when it comes to products that are popular domestically.
Many other major Japanese firms such as Daikin and Panasonic have also announced they will relocate parts of their Chinese production back home, the news agency said.