FROM: John Mendel
RE: Impact of Flooding in Thailand
DATE: October 31, 2011
Over the past several weeks, Thailand has experienced devastating flooding due to typhoons and a heavy rainy season. As the flooding continues, a number of Honda suppliers in Asia are currently unable to maintain parts production and I regret to inform you that this will affect North American production of vehicles from November through mid- to late-December. Unlike the initial situation following the earthquake and tsunami in Japan when we were uncertain about its duration, we are confident about the finite time frame regarding the production disruption that will result from the situation in Thailand.
To better manage the available parts supply in North America, effective November 2, Honda must take the following actions:
- We will temporarily adjust automobile production at all six Honda auto plants in the U.S. and Canada. Currently, we anticipate that this situation will require adjustments through mid- to late-December.
- At this time, we can confirm that auto production will be at approximately 50% of the original plan through November 10, 2011. Subsequent adjustments will be announced as they are determined based on the parts supply situation.
- The December on-sale date of the all-new 2012 Honda CR-V could potentially be delayed by several weeks. The on-sale date will be announced in the near future.
As background, the vast majority of parts and materials used to produce these products are purchased from suppliers in North America, yet a few critical electronic parts are sourced from other regions of the world, including Thailand, which has become a center of automotive and electronics manufacturing. We are working closely with our suppliers in Thailand and throughout our global network to reestablish the flow of parts for the products we make in North America.
We deeply regret any inconvenience this may cause to our customers, and we’re working closely with our suppliers and operations throughout the world to manage this situation.
Ironically, we just announced that the last of our six auto plants in North America has returned to normal production following the tragic earthquake and tsunami in Japan – and we have begun production on a new second shift at the Indiana plant. Now, we sincerely appreciate your patience and understanding as we manage yet another unprecedented situation caused by Mother Nature.
I know you join the Honda family of companies in North America in expressing our deepest sympathy and concern for the victims of the floods in Thailand and our sincere hopes for the earliest possible relief and recovery from the damaged areas.
We will continue to communicate with you on an ongoing basis as information becomes available. I sincerely thank you for your continued partnership and understanding as we navigate the road ahead. In the meantime, please continue to maximize your sales and separate from the rest of the pack by making sure we take care of our customers.
Finally, we realize this interruption comes at a time when we were just getting our sales momentum back on track. The good news is that we have already been through the toughest event of 2011 and, by working closely together, we have continued to prosper. Although this new challenge comes during our holiday season, we fully expect to remain strong in the market as we work to close out the year successfully. Rest assured we will make our best effort to improve the supply of vehicles as soon as possible.
MESSAGE FROM DCH GARDENA HONDA: Our thoughts and prayers go out to all those affected by the events in Thailand, we hope for the best for all.
While future inventory levels will most definitaly be affected by this news, our current inventory is at the highest level of the year so NOW IS THE TIME to buy your new Honda.