Honda expansion gets perks

Honda Philippines Inc. (HPI) has received pioneer status for a project that will expand its motorcycle production capacity to 600,000 units from the current 400,000 units a year.

According to data from the Board of Investments, the P2.46-billion expansion project will be implemented within the existing HPI motorcycle plant at the First Philippine Industrial Park in Tanauan, Batangas.

The project will employ 507 people once commercial operations start in April 2012. It will be implemented over the next three years.

“This will accommodate the strong demand for motorcycles in the years to come, as (HPI) sustains its annual double-digit growth. Motorcycles are considered an affordable means of transport for Filipinos,” Trade Secretary and Board of Investments chairman Gregory Domingo said in a statement.

The project entails the construction of new buildings within the HPI compound, as well as the acquisition and installation of new machines and equipment for the production of motorcycles and motorcycle parts and components.

Parts and components to be manufactured by the expansion facility include engine parts, frames or chassis, fuel tanks, and major plastic components for different motorcycle models.

Initially, all parts and components produced will be sold to the domestic market. High-value parts may eventually be exported to other countries and other Honda plants outside the Philippines.

Motorcycles to be churned out by the new facility, on the other hand, will initially be composed of 110-cc automatic transmission models. Other models, both automatic and manual, will also be produced in the years to come.

At least 30 percent of the parts to be used for the motorcycles should come from local sources. The achievement of this target, however, was dependent on the capability of local parts suppliers.

All motorcycles to be manufactured in the expansion facility will be sold through HPI’s 825 dealers nationwide.

With its pioneer status, the project will enjoy a six-year income tax holiday, duty-free importation of capital equipment, plus other fiscal and non-fiscal incentives.—Abigail Ho