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RPT-INTERVIEW-Honda sees sales surge in ASEAN

By Vithoon Amorn

BANGKOK, Feb 27 (Reuters) - Honda Motor Co, Japan's second-largest automaker, said on Thursday a production expansion in South East Asia would boost its car and commercial vehicle sales in the region's main markets by 30 percent this year.

Satoshi Toshida, chief executive of Bangkok-based Asian Honda Motor Co Ltd, told Reuters the company would raise its sales to 120,000 vehicles in Thailand, Malaysia, Indonesia, the Philippines and Singapore this year from 90,341 units in 2002.

Last year the company registered a similar rate of sales growth, 29.6 percent, in the five countries, which are all in the 10-member Association of South East Asian Nations (ASEAN).

"We expect substantial sales growth in ASEAN this year, of over 30 percent, as we will not be facing supply constraints seen in 2002," Toshida said.

He expected Honda's sales in Thailand, its biggest ASEAN market, to surge to about 70,000 units in 2003 from 54,266 cars and commercial vehicles last year.

Analysts expect Thailand's booming car market to grow to 460,000 in 2003 from 409,362 sold in 2002.

Honda, which this week launched its new mid-size Accord sedans in Thailand, trailed rival Toyota Motor Corp in the country's car segment last year. Japan's top carmaker sold 50,734 sedans in 2002 against Honda's 35,464.

CAPACITY EXPANSION

Toshida said Honda's investment in the last year would help raise its combined assembly capacity in four ASEAN countries to 173,000 vehicles a year by mid-2003 from 108,000 in 2002.

Honda said last July it was investing about $175 million in new assembly plants in Malaysia and Indonesia, and in facilities for producing engine blocks, cylinder heads, and car transmissions in Thailand, Indonesia and the Philippines.

The firm launched 170-million-ringgit production facilities in Malaysia's southwestern state of Malacca in January with an initial capacity to produce 20,000, mainly sedans, a year for the domestic market.

Company officials said the Malaysian plant will double its capacity to 40,000 to accommodate exports to other ASEAN countries after 2005, when Malaysia is due fully to open up its car industry to foreign competition under the ASEAN Free Trade Area (AFTA).

Toshida said Honda's plant in the central Thai province of Ayutthaya will produce 15,000 Accord sedans a year, of which about 6,500 are for export, 50 percent going to Australia.

Honda's recent expansion in ASEAN is part of an efficiency drive in which all production of Honda's City subcompact model in Southeast Asia will be centralised in Thailand by 2004, ending assembly in Indonesia and the Philippines.

The company has actively exploited ASEAN's "AICO scheme", which allows Honda's Thai and Indonesian manufacturing units to exchange auto parts and accessories produced in the two countries at preferential tariffs.

TAGS: Industry