Honda Vietnam said the company plans to shift from manufacturing to importing vehicles due to manufacturing interruptions and market stagnation caused by the COVID-19 pandemic.

A motorbike assembly line at Honda Vietnam company in Vinh Phuc
(Photo: VNA) 

In a document recently submitted to the Ministry of Planning and Investment, Honda Vietnam CEO Keisuke Tsuruzono said the company’s manufacturing output is expected to drop 30% for cars in 2020 and 43% for motorbikes from April to June. As a result, the company’s revenue would decrease significantly.

The market saw a year-on-year drop of 32% in car sales in the first three months this year. The motorbike market has been affected since early April. The document also mentioned the social distancing order imposed between April 1-22 as one of the reasons for the fall.

According to Tsuruzono, the manufacturing stagnation was partly due to a shortage of spare parts supplied by several nations which were under a lockdown due to the COVID-19 pandemic. In addition, the company had to suspend operation from April 1 to 22 and sale agents suspended business under social distancing measures.

Honda Vietnam proposed measures to continue removing difficulties for motorbike and car manufacturers by extending deadlines for their tax and land leasing payments.

The company also made proposals on reducing value-added taxes and registration fees for customers while reducing interest rates by 5-6% for spare parts manufacturers.