Honda considers relocating Vietnam bike production back to Japan

The production and assembly lines of motorbikes with under 50cc engines could likely be relocated to Kumamoto Prefecture this year, according to the Honda Vietnam representative.

Details for the plan could not be disclosed immediately, the source added.

It was reported earlier this year that the production lines will be transferred back to Japan to meet domestic demand.

Honda’s annual motorbike sales in the Japanese market are around 200,000 units, half of which are those with under 50cc engines.

With production costs in Japan soaring, the company previously had to move part of its production to Vietnam to save costs.

But it is now costlier to import made-in-Vietnam motorbikes than make them domestically, and Honda is thus likely to reverse its decision.

Millions of Honda two-wheelers, such as the Dunk scooters, will be manufactured in Japan instead of Vietnam if the decision is officially enacted, according to the Vietnam News Agency.

Honda Vietnam is expected to ship 25,000 50cc Dunk scooters to Japan annually, with the first batch of units exported in January last year.

The company is currently exporting more than 100,000 Honda motorcycles, including the SH, SH Mode, PCX, and Lead, to the U.S., the EU, Africa, and many Asian countries besides Japan.

Motorbikes made by Honda Vietnam have an average localization rate, or the amount of materials that can be domestically sourced, of 95 percent.

The continual weak-yen trend is creating advantages for Japanese manufacturers, especially when it comes to products that are popular domestically, the Vietnam News Agency newswire stated.

Many other major Japanese firms such as Daikin and Panasonic have also announced they will relocate parts of their Chinese production back home, according to the news agency.