Nissan and Honda’s Thai workers are about to face mass layoffs. Both Japanese auto companies are shutting down a few of their respective plants in Thailand. Southeast Asia’s largest automotive industry is about to take a hit from these company closures.
THAILAND’S AUTO MARKET
Japanese automotive companies began investing in Thailand’s local auto industry as early as 1960. The first noted Japanese company to partner with a local Thai company was Nissan. With the inclusion of investments from Western and Korean companies, Thailand’s local industry began to bloom. As of 2019, Thailand is the world’s 10th largest automotive industry.
Despite their reputation for strong automotive outputs, Thailand’s vehicle production has seen significant decline. This decline began during the COVID-19 pandemic in 2020. Similarly, the country’s car sales for September and October 2024 were down, forcing its industry body to revise end-of-year targets.
HONDA AND NISSAN’S CUTDOWNS
Today, Nissan’s Thailand plants will face one of the company’s many cost-cutting measures. Earlier this year, Nissan reported poor financial performance under the leadership of Makoto Uchida who replaced disgraced ex-CEO Carlos Ghosn. Nissan is set to furlough 1000 jobs in Thailand. These 1000 jobs are 9000 of Nissan’s planned worldwide layoffs.
By September 2025, the company will also “partially stop production” in one of its Samut Prakan factories and combine its production with its second plant in the same region. The first plant can produce around 220,000 vehicles and the second plant’s capacity is 150,000 units. Both plants are the source of the Kicks for the Southeast Asian market and the Nissan Terra for West Asian and African countries.
Meanwhile, Honda announced plans to cease operations in its Ayutthaya plant by 2025. Instead, production will be moved to another plant in Prachinburi. Honda’s cutdown marks another Japanese car brand’s slowing performance in the Southeast Asian region.
Honda and Nissan’s performances in Thailand mirrors their own in China, where both brands are losing to local competition. Additionally, Chinese EV companies are growing stronger in Southeast Asia, employing aggressive expansion strategies and multiple partnerships.
Earlier this year, ASEAN urged its member countries to make the necessary shift to low-emission vehicles. While Southeast Asian countries have varying projects and incentives to support this, the shift is already affecting non-EV sales. Japanese automakers that have not yet evolved with low-emission vehicle demands are seeing poorer performances.
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