Honda's pullout from Philippines due to global uncertainty

26 February 2020

Honda Cars Philippines (HCPI) has announced that it is to cease production operations at its plant based at Santa Rosa in Laguna province.

Honda said the closure would take place in March and was based on a study of “efficient allocation and distribution of resources”.

“As such, after consideration of optimisation efforts in the production operations in Asia and Oceania region, Honda decided to close the manufacturing operations of HCPI,” the company said.

It said it would continue to sell vehicles in the Philippines and would maintain its after-sales service operation in the country.

The news comes shortly after Nokia was reported as saying it is shutting down two research and development centres in the country.

Nokia was reported to be planning to run down operations at its Technology Center in UP-AyalaLand Technohub in Quezon City between March and September, and that it had also decided to close its Manila technology Centre by the end of the third quarter of 2020.

US-based bank Wells Fargo also said it was downsizing its operation in the Philippines by cutting its tech workforce from 750 to 50.

Philippines trade secretary Ramon Lopez blamed the closures on the uncertainties in the global market.

Lopez said the coronavirus and the US-China trade war had driven companies to rationalise operations, according to the official Philippine News Agency.

“Look at the world; we are a small player, a small country compared to the global world demand. So you can expect a lot of this rationalisation,” he added.

Lopez said the decision of global companies to shut down their operations was “not unique” to the Philippines but was happening in many countries.

“It’s about their competitive stand. They may not be competitive in the Philippines but it has something to do with the competitiveness structure of their industry. Look at Honda. Their strength here is in motorcycle not in car,” he said.

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