Honda puts on hold plans to expand Batangas plant

Posted at 12/03/2012 8:01 AM | Updated as of 12/03/2012 11:45 AM

MANILA, Philippines - Honda Philippines Inc. has put on hold its plan to expand its motorcycle plant in Batangas as demand for the two-wheel vehicles is not growing as projected, according to a company official.

“It did not materialize because the market is not growing as expected,” said Generoso Paralisan, assistant vice president for external affairs at Honda Philippines.

Honda filed an application with the Board of Investments last year to expand the motorcycle plant’s production capacity to 600,000 units per year from the current 400,000 units.

The expansion would have involved construction of new buildings and acquisition of equipment.

The expansion was supposed to meet strong demand for motorcycles.

But while the plan did not materialize, Paralisan said Honda is still looking to achieve higher motorcycle sales for the current fiscal year.

He noted the firm sold more than 300,000 units in the previous fiscal year which ended in March.

He said available financing schemes are seen to help support higher sales as it makes it more affordable for consumers to purchase motorcycles.

Sunday Julaton, national sales and marketing manager of Honda Philippines told reporters the firm is looking to sell almost 400,000 units for the current fiscal year.

Honda Philippines accounts for more than 50 percent of the motorcycle market.

The firm sells eight motorcycle models in the country, with seven being manufactured locally.

Of Honda’s total sales, the bulk or 65 to 70 percent is accounted for by solo motorcycle models, while the balance comes from the motorcycle business line.