Copyright Matt Cardy, Getty Images
Industryweek 29236 Honda Logo On Car Mattcardy G 1 0
Industryweek 29236 Honda Logo On Car Mattcardy G 1 0
Industryweek 29236 Honda Logo On Car Mattcardy G 1 0
Industryweek 29236 Honda Logo On Car Mattcardy G 1 0
Industryweek 29236 Honda Logo On Car Mattcardy G 1 0

Honda Finally Starting Up 3-Year-Old Factory It Has Never Used

April 16, 2018
Honda built the second location anticipating a market in Brazil that would swell to up to 5 million units a year in the country. Instead, sales fell.

Honda is finally planning to open its newest factory in Brazil, idle since it was built in 2015. But not for the reason they originally intended.

The carmaker built the Itirapina, São Paulo, plant for 1 billion reais (US$290 million) with the plan of doubling its capacity in the country. Instead, the automaker will transfer operations to the facility in 2019 to increase productivity and efficiency, as it seeks to absorb higher costs rather than passing them onto customers, said Paulo Takeuchi, executive director of institutional relations at Honda in Brazil.

Honda built the second location anticipating a market that would swell to up to 5 million units a year in the country. Instead, sales of cars fell from 3.8 million in 2012 to 2.57 million last year, according to Anfavea data. This year, overall car sales are expected to increase by 12% and Honda is forecasting growth of 5%.

"While that’s good, it’s not enough to warrant the opening of this factory," Takeuchi said. "We’re doing this because it will help increase our ability to compete in the Brazilian market with costs rising."

Honda’s transfer of production of vehicles from its Sumare unit to the new one should be concluded in 2021. As an example of productivity gains, Takeuchi cited new paint technology that requires one less layer, which means less money and time spent. It will maintain the first facility to make motors and other parts.

The carmaker association, known as Anfavea, revealed that auto sales grew 32% in March compared to a month earlier, and 16% through the first quarter compared to the same period in 2017. Honda’s sales jumped 38% in March from February, and closed the quarter up 11%, according to Anfavea data.

"With low inflation, unemployment dropping and interest rates at the lowest level in history, it’s a question of time before consumers have more access to credit," said Anfavea President Antonio Megale, in a press conference earlier this month. "We’re very optimistic about the future of the economy and the industry."

By Leonardo Lara

Popular Sponsored Recommendations

Four Common OT Cybersecurity Pitfalls for Manufacturers

April 4, 2023
For the last six years, Dragos has leveraged their Professional Services team to develop an on-the-ground understanding of the realities facing the industrial community and to...

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!