Honda Will Shutter A Japanese Factory To Shift Manufacturing Towards EVs

1 month ago by Mark Kane 15

Honda Urban EV Concept

Honda, needing to address a serious problem of domestic production overcapacity in Japan, has decided to close one of its plants – the 1964 Sayama Automobile Plant.  The facility will close its doors by March 31, 2022.

Honda Urban EV Concept

Today’s production will be consolidated into the nearby Yorii Automobile Plant, which is much more efficient, and not surprisingly a much newer facility (opened in 2013).

Both sites have the capacity to build 250,000 vehicles each, while overall, Honda’s capacity in Japan stands at 1.06 milion cars, but lowering that to ~800,000 would increase utilization from today’s low 76%.

At the same time, the Yorii plant will become Honda’s global center for electrified vehicle.s The production processes will be then applied in other plants globally.  States Automotive News:

“Yorii will be positioned as a global center for electrified vehicle production. It will serve as a template for overseas manufacturing as Honda launches more hybrids and EVs overseas.

A longtime EV skeptic, Honda announced in June that it had established an Electric Vehicle Development Division to create EVs based on dedicated all-electric platforms. That is a departure from Honda’s current stance.”

Honda called the move an “evolution”.

At the upcoming Tokyo Motor Show, Honda will present several new concept electric cars, including the new Sports EV Concept…although at this point we’d much rather see “production-intent” offerings on the show stand:

Honda Sports EV Concept

Press blast:

Honda to Evolve its Automobile Production System and Capability in Japan

Honda Motor Co., Ltd. today announced that the company will evolve its automobile production system and capability to further enhance Mono-zukuri (the art of making things/manufacturing) in Japan. In more concrete terms, Honda will pursue two key initiatives: to evolve production operations in Japan and to newly establish a function to evolve production technologies in Japan to be shared globally.

Due to the rapid advance of new technologies such as electrification and intelligence technologies, the automobile industry is undergoing an unprecedented and significant turning point in its history. Anticipating major changes in automobile production, Honda will largely evolve its production operations in addition to product development operations.

Since its foundation, Honda has been establishing the technologies and know-how of Mono-zukuri in Japan and then evolving them rapidly to operations outside Japan, where each region applies its own originality and ingenuity at the spot. This is how Honda has achieved growth on a global basis. However, from here forward, automobile manufacturers must be able to accommodate new technologies speedily, and therefore it became essential for Honda to further evolve its production function in Japan and establish a structure where Japan operations will lead the other Honda operations on a global basis.

Based on this understanding of the situation, Honda will pursue the following initiatives.

1.    Evolving production operations in Japan

While leveraging the respective strengths of automobile production plants in Japan, Honda will establish a production system and capability which will enhance Honda’s competitiveness.

1)    Saitama Factory:

In order to accommodate the production of vehicles equipped with new technologies such as electrified vehicles, the automobile production of the Sayama Automobile Plant and Yorii Automobile Plant will be consolidated to the Yorii Automobile Plant, which employs the latest production technologies. This consolidation is expected to be completed by around fiscal year 2022 (fiscal year ending March 31, 2022).

Production know-how involving new technologies will be amassed at the Yorii Automobile Plant and evolved from Japan, Honda’s Mono-zukuri leader, to Honda operations outside of Japan, which will establish a structure where Japan operations will lead other Honda operations on a global basis.

Associates who are currently working at Sayama Automobile Plant will be transferred mainly to the Yorii Automobile Plant and fully utilize the production know-how they have amassed in their career.

2)    Suzuka Factory:

Suzuka Factory will continue to establish technologies and know-how for producing highly-competitive mini-vehicles and also continue to play a role to evolve such production technologies and know-how horizontally to other Honda operations on a global basis.

3)    Yokkaichi Factory of Yachiyo Industry Co., Ltd. (Yachiyo)

Striving to further increase the efficiency of producing low-volume-production models, which Honda is currently entrusting to Yachiyo, Honda and Yachiyo today signed a basic agreement to begin discussion toward making Yachiyo’s automobile assembly business a wholly-owned subsidiary of Honda.

While leveraging the technologies and human resources amassed at Yachiyo, Honda will further increase efficiency by optimizing its low-volume production system and capability.

The two companies will continue to discuss more details, such as the scope of Yachiyo business Honda will take over, and strive to reach a final agreement.

2.    Newly establishing a function to evolve global production technologies in Japan

Within the Yorii Automobile Plant, Honda will newly establish a function to create, standardize and globally share new production technologies to accommodate new automotive technologies such as electrification technologies. Honda associates from production operations in each region will come together in Japan to jointly plan new production technologies and processes based on know-how amassed in Japan. Then, such production technologies and processes will be verified on the demonstration line built for this function, matured and then become standardized. Standardized production technologies and processes will be evolved horizontally to other Honda operations on a global basis so that Honda can launch high-quality new products to the market speedily.

Moreover, through this function, Honda will further develop and foster global human resources.

Through these initiatives, Honda will further strengthen and significantly evolve its automobile production system and capability in Japan to reinforce its automobile business structure.

source: Automotive News

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15 responses to "Honda Will Shutter A Japanese Factory To Shift Manufacturing Towards EVs"

  1. jelloslug says:

    Better late than never I guess…

  2. Don Zenga says:

    This is becoming a non-stop nonsense. First VW chief said that so many workers have to be laid off to produce EVs, next Ford chief said that 30% lesser workers are needed, now Honda says that they are shutting a plant for move towards EVs.

    In case of Honda, its the sales of mini-vehicles that are increasing in Japan and besides that the general decline and aging of population decreases the demand and that trend needs to be blamed.

    The fact that vehicle sales are increasing in the developing world and the vehicle population could triple and this will increase the need for labor is completely ignored.

    Well, one can argue that a smart phone has the function of a watch, calculator, camera, audio-video player/recorder, GPS, video game, cordless phones, CDs, DVDs, computer, etc. So by making smart phones, all those labor who produced those devices would have lost their jobs. How come no one raised this issue then, but now they are screaming at EVs.

    Every new technology brings an initial trouble in labor market, but as the demand for that product picks up, the labor market returns to normal.

    Ideally they should manufacture plugins which has both a motor and an engine and this will need some extra material and labor and will still reduce the oil consumption.

    1. Mark.ca says:

      Yes, they say that they need 30% less workforce but somehow the evs are still not profitable for them. I’m thinking they just don’t want to change and look for excuses.

    2. Martin Winlow says:

      Er, except that hardly anyone who owns a hybrid (assuming this is what you are referring to) ever plugs them in. Yes, they are a bot more efficient but not much – 10% max.

    3. Will Davis says:

      The only nonsense is you somehow overlooking the basic fact the article presented: There’s overproduction on a domestic level in Japan. Yeah, Honda could still have increasing sales but if they’re producing way more cars than necessary, how is that common sense?

  3. ffbj says:

    Just the tip of the iceberg. GM is talking about dropping models left and right, shutting down production, Ford too.

    Peak car has hit in many countries, and production numbers will continue to fall perhaps for decades. Eventually it will stabilize, but at much lower production numbers.

    1. Don Zenga says:

      They may drop sedan/coupe models and increase crossover models as that segment has the highest market share. But no need to shut down production, just retool for different model.

    2. bogdan says:

      Well Tesla will be happy to fill the gaps.
      It’s not like we won’t need cars in the future. We just won’t need such cars they are manufacturing and selling at the moment. And they know that very well.
      There are no more classical mobile phones because we are in the smart phone era. Same thing happens to the car industry right now.

  4. Alex says:

    There is significant overcapacity in ICE car production. 76% utilization rate is very low indeed. They had to shut down production even without electric cars. And with customer preferences shifting there will be more layoffs for sure.

    It’s a mistake to believe ICE car makers know how to mass produce cars. That’s lipstick on a pig. Reality is they have significant overcapacity in technology that is quickly becoming obsolete.

  5. Clive says:

    Hello Honda !!

  6. Richard says:

    Honda has been really slow with understanding the move towards electrification. They need fresh leadership.

    1. bogdan says:

      Like hiring Elon Musk, but that’s not possible.
      They could clone him though!!!

  7. Martin Winlow says:

    It’s time Honda stopped d*&king around with concepts and – at the very *least* – came up with a LEAF equivalent otherwise, they’ll be shutting a lot more factories before long.

    It is simply unbelievable that Honda has left it so late to get into EVs. Especially so considering all the flannel they put into their fantastic (and fantastically expensive) marketing a few years back about being so advanced and green – remember the ICE-powered toothbrush TV ad? What the Dickens is going on in Minato (Honda’s HQ)?

    1. jason says:

      honda has the clarity ev. i test drove it and found it unimpressive. 89miles for a car introduced in 2017. and until they start making ev on ev platform instead of fuel cell platform its not going to get any better.

  8. bjrosen says:

    The urban concept looks like something from a Pixar movie, could you imagine driving something as ridiculous looking as that?

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