Japanese automaker Honda will shift production of its Accord hybrid sedan from Japan to Thailand. According to sources Honda wants to take advantage of Thailand’s tax incentives for manufacturing greener cars.
Honda’s plan follows Mitsubishi’s announcement earlier this month of its intention to make plug-in hybrids in the Southeast Asian country, starting in early 2021. The move will start with the Accord model scheduled for release in Japan in early 2020 and is also considering exporting from Thailand to other countries. Honda plans to spend 5.82 billion baht ($189 million) on the plan, which will expand its output of cars with electric motors.
The Thai government is encouraging production of such cars including electric vehicles and hybrids by dangling corporate tax breaks, cutting excise duties and lowering levies on imported manufacturing equipment.
Honda’s plant in Sayama, north of Tokyo, has been making the Accord but will terminate auto production by the end of March 2022. Honda decided it would be more efficient to import the Accord from Thailand, where its plant already makes the model with RHD configuration.
The Accord is considered a high-end sedan and a signature model for Honda. It sold about 500,000 units in 2018, mainly in the U.S. and China, however it sold only about 2,000 in Japan.
The Thai plant turned out a little more than 3,000 Accords in 2018, but the figure is expected to significantly increase in 2019, driven by the planned increase in hybrid output.
Honda’s shift comes as world’s automakers grow more selective about investments, aiming to enhance efficiency. Emerging economies in Asia, which are rapidly becoming more technologically advanced, have become appealing options for making not just compact cars but also hybrids.
As per reports, Toyota and Mazda are also planning to make electrically assisted vehicles in Thailand.