Honda thinks maybe it’s better in Thailand

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599thailand

Details are still thin, but Honda seems to be preparing to shift manufacturing of several models over 400cc out of Japan and into Thailand, citing the growing strength of the Yen and a need to attend to emerging markets. Don’t worry, flagship models such as the CBR1000RR, CBR600RR, and Goldwing will most likely remain under Japanese-only production. But, bikes like the 599 and 919 Hornets, plus the XR650 and other entry-level models could be wearing “Made in Thailand” stickers as early as mid-2012.

The news of the strategic move makes perfect sense for curtailing production costs while continuing to infiltrate emerging markets. As major corporate moves by Harley-Davidson into India and the KTM-Bajaj expansion into Malaysia have made evident, the South and East Asian motorcycle markets are massive and ever on the rise, dwarfing the US in volume. No wonder, then, that Honda is also looking to capitalize on both existing and new riders with growing incomes looking to match their new financial status with larger machines, yet affordable machines.

What does this mean? While the US market remains and will continue to remain viable to a certain degree, the writing is on the wall, folks. Unless the days of boundless credit magically return like winged unicorns, or the CBR250R turns into American Honda’s all-time best seller, corporate resources for catering to the US market are in serious risk of getting considerably thinner.

via MarketWatch

  • pplassm

    They haven’t been catering to the US for a while, now.

    • http://hellforleathermagazine.com Grant Ray

      Yeah, that’s why the article ends with the word, “thinner.” But I can add emphasize on the “er” part if you like.

      • aristurtle

        I think your conclusion is wrong, actually. Whether or not they import a bike to the US is going to be determined largely by exchange rates: if the bike is manufactured where the local currency is strong relative to the USD, it’s not going to be very profitable to sell it in the US (or the price will be so high that it’s non-competitive). This is why the made-in-Italy Honda Hornet never lasted here.

        Now, if they’re making them in Thailand instead, suddenly it becomes possible to import them to the US and still make money.

        Besides, my Kawi Ninja250 was built in Thailand and it’s solid. Maybe now I’ll actually be able to buy a new Hornet instead of tracking down one of the few older, pre-FI ones that made it to the States last round.

        • http://hellforleathermagazine.com Grant Ray

          Actually, how exchange rates affect production cost is only one of many factors for why bikes do or don’t come to a country like the US. There’s also the cost of certification per model, which is around $40,000 in the US, the cost of development for marketing strategies and materials, the cost to physically create those materials, the cost of development and creation for country-speficific needs within manuals and technical documents, the cost to legally insure the life of the product, dealer response to the salability of that model within their regional markets, dealer and technician training for the new model, etc. It’s simply not as easy as “make bike at X, sell bike at profit.”

          And I never said motorcycles built in Thailand were inferior.

          • aristurtle

            Well, yes, I know it’s more complicated than just one factor, but the Euro->USD exchange rate was the biggest factor in killing off the Hornet for the US market last time, and I kinda like the Hornet.

            Basically, what I’m saying is that with the currency roadblock out of the way, I think that Honda will be more likely (rather than less likely) to be able to have a larger range of motorcycles in the US, which has been a bit of a weakness of theirs. Exchange rates were certainly not the only factor but they were definitely a major one.

            (And if “Don’t worry, flagship models will most likely remain under Japanese-only production” wasn’t supposed to imply that bikes built in Thailand are inferior to ones built in Japan, what exactly is it supposed to mean?)

            • http://hellforleathermagazine.com Grant Ray

              “Don’t worry” isn’t about quality control, it’s about brand. The heart of Honda Motorcycles has always been racing. If the best of Honda was no longer made in Japan, what would that say about Japan’s manufacturing abilities? Which is why the production of flagship models will remain in Japan.

              I would say the same if BMW moved all production except M sedans out of Germany and into Portugal.

  • Jon B.

    Made in Thailand strikes me as kind of romantic.

    • http://vtbmwmov.org Eben

      You don’t own a recent KLR, I guess.

      • http://www.advrider.com/forums/showthread.php?t=305107 stickfigure

        The KLR would lack for romance even it it was handmade by elves at the north pole.

        • Jon B.

          That is an odd idea of romance.

  • Roman

    More affordable low displacement bikes from Honda? Sounds good to me.

    • muckluck

      doesn’t really mean they will be coming to the US though.

      • Roman

        My guess is that the CBR250R is kind of a test case for the new business model. Considered high end in its target market, but also sold stateside as a neat little displacement bike. If it sells well, I’m sure we’ll get more tasty low displacement models.

    • http://rider49er.blogspot.com Mark D

      Are they ever going to bring the new 599 here? That’s a bike I’d rock. Maybe making it in Indonesia will make it cheap enough to throw a few in a container with the CBR250s…

  • Carleton

    Honda, please bring the Hornet back to the U.S. I don’t care where it’s made but a slightly lower price point this time might work out a bit better. I love my 599 but a $6000-$7000 new model would certainly tempt me into a showroom.

    • Myles

      I dunno, I’d be hard pressed to part with my ’04. Analog clocks, carbureted, big old round headlight. Hard to ask for more in a bike.

      Buy a new chain and go down one tooth in the rear, it changed the bike for me. Going down just a tiny bit made me stay in a lower gear (or two) more often so I effectively added a bunch of teeth. Except for when I’m on the slap and turning fewer revs and saving fuel. And the new chain feeling is hard to replicate.

  • Deltablues

    Suzuki Bandit 400, Honda CB-1, Yamaha FZR 400…there was a time when motorcycles in this displacement category sold well and were desired by American riders.

    Now, we get the sorta ‘big-dumb-stupid’ motorcycles in the U.S.A.

    But at least Honda is being smart so they can stay in the motorcycle business.

    Living in Arkansas, I can bet you that Honda motorcycles makes the vast majority of it’s profits from the sales of ATV’s.

    • The other Joe

      On that last point I would guess scooter sales in Asia

    • http://worldof2.com/ jpenney

      “Living in Arkansas, I can bet you that Honda motorcycles makes the vast majority of it’s profits from the sales of ATV’s.”

      That’s a sad statement given how great the road riding is in Arkansas. As a resident of Kansas City I’m supremely jealous of the amazing riding you all have.

    • adrenalnjunky

      Living below you here in Louisiana, I know exactly what you mean. Especially now that it is deer season – every other truck seems to have a ATV in the bed, or a trailer with 2-3 of them loaded up every day now. People hunt int he morning then go to work with them still in their trucks.

      And all I kinda regret is that I never do get up into the Ozarks this year with my CBR for a few days of riding.

  • nick2ny

    I wonder what Soichiro would think, I really do. I understand when MBAs make moves like this, but I can’t help but think an engineer-founder-owner type would resist something like this to the very end.

    But, what do I know.

    • http://www.amarokconsultants.com michael uhlarik

      Soichiro would have understood that today, manufacturing quality is not related to national character anymore. Does your Apple product work any worse for having been made in China?

      Soichiro was many things: ambitious, racing fanatic, womanizer, perfectionist… but he was also pragmatic and understood business. I think he would have said “great! I love Thailand.”

      • http://www.twowheelsplus.com/ Anders

        +1

  • R13

    Correct me if I’m wrong but wasn’t the 599 and 919 (which is no longer being made anyways) always made in Honda Italy for the european market? That was the cited reason for the price being higher the few years they were imported into the US.

    • BigHeartedTone

      You’re not wrong – my Hornet was made in Italy.

      • Myles

        And the only goddamn part that ever fails is the rectifier/regulator. Which is an Italian (Ducati) part.

  • Core

    *Sighs* This is depressing. I kind of feel like I was born at a shitty time the way things are going. Its like this grand shift of business in the world. IE.. Countries that were first, are now sliding down the slope, and 3rd world countries are getting the business and moving up, which is awesome in a way. Well I guess this was actually starting to happen before my time, but its obviously only getting worse.

    • Roman

      I get what you’re coming from, but from a historical perspective, you were born at a pretty awesome time, in a pretty awesome place. Not to get too pedantic, but my grandparents were born in Ukraine in the 1930s. Famine, followed by WWII, followed by 40 years of living under communism. Just saying….

    • http://rider49er.blogspot.com Mark D

      I see what you’re saying, but its definitely a logical trap to think that we live in a zero-sum global economy.

      I prefer to be thankful that I don’t have to spend life working on an assembly line :)

      • BMW11GS

        well said

  • Archer

    I understand the people that find this depressing, I really do. I’m one of those guys who gets excited when the Kodama super express stops in Hamamatsu… But the truth is the wiring harness in my 07 600RR and a bunch of other parts were probably made in China (for sure the harnesses in 09′s are, as I found when a riding partner totaled one in a canyon last summer- big sticker wrapped around the thing.)

    Thailand is kind of a hole, but the people are every bit as capable as the several hundred thousand Brazilian nisei Japanese who work in Hamamatsu on extended visas. Those are the people putting Hondas, Suzukis and Yamahas together today. And with Japanese management, I don’t think we’ll notice a difference in quality of a Thai assembled bike.

    I hope.

    • robotribe

      To be frank, such folks are needlessly torturing themselves with bullshit notions of outdated nationalist significance. Those folks probably still believe Chevys & Fords are “all American” and all BMWs are built by white guys wearing lab coats in good ‘ol Deutschland; in both cases, they’d be dead wrong.

      Bottom line: stuff is made all over the world by companies who’s headquarters are on opposite ends of the manufacturing locations. Japanese, American, German, French etc. companies have been doing this for decades; some for maybe a century now.

      Quality isn’t determined by geographic location of the people who are doing the work. As you said, quality is ensured with the right management in place; working conditions come in to play as well.

      I have no doubt a Taiwanese-built Honda motorcycle will be no less reliable than a Honda Accord coming off the assembly plant in Ohio.

  • oldblue

    I’m pretty sure that’s where my Thai-umph was made, and I’m cool with that…

    • Devin

      If the 5th # on the VIN is a T, it was made in Thailand. If it is a J, it was made in Jolly Old.

      • Kurt

        It’s actually the first digit of the VIN that signifies location of manufacture.

        • Devin

          Then I have been BS’ed by the Triumph forums.

  • robotribe

    Sometimes I miss my 599, but I soon remember how much I hate carburators.

    If the VTR 250 is in the mix of Thailand possibilities, maybe there’s a slim chance it could make it’s way States-side.

    • http://www.facebook.com/beastincarnate Ben Incarnate

      Agreed regarding the carbs. It’s funny how often the 599 is mentioned in comments here. You’d think it sold well.

      • robotribe

        It’s the naked bike most of those interested in the class wanted for many years, but was arguably flawed when going head to head with the less-expensive and fuel-injected SV650.

        IMO, even as a former 599 owner.

    • JVictor75

      I wonder from time to time what the market would be for an aftermarket FI setup for motorcycles would be.

      I’m thinking of something like the Fast Burn XFI (or the Holley Projection) system for older American cars and trucks. Or if you are bags of money laying around rich, the Inglese injection system for Hot Rods.

      I’m guessing that it would probably be hellishly expensive to do the initial tooling, but I’m just vaguely wondering what the interest level for aftermarket motorcycle specific EFI would be.

      I’m not really planning to do anything with the info, really. I’m just curious.

      • aristurtle

        There’s a company that makes a kit for the Ninja 250 but I’ve never seen a bolt-on FI kit for anything with more than two cylinders.

        • Zach

          What company would that be?

          • aristurtle

            Here: http://www.ecotrons.com/Kawasaki_Ninja_250cc_EFI_kit.html

            “Plug-and-play” is a little optimistic, honestly, as one of the steps is to weld an oxygen sensor bung into your exhaust, but it’s an all-in-one kit.

            I’ve also seen entirely home-made setups where someone cobbles together the parts needed from other bikes (basically a throttle body set, a set of fuel injectors, the sensors, the fuel pump, and harnessing to connect all of it) and then powers it with something like Megasquirt. That could I guess be doable for the 599, using F4i parts or something, but it wouldn’t be exactly straightforward.

            I have to say that while the newer, fuel-injected 599 that we don’t get to have here in the US is pretty impressive and all, I wish they stayed with the round headlight. I really like the older Hornet’s headlight: it looks like a normal round H4 light but it’s actually got two bulbs and a custom reflector and stuff.

            edit: also don’t forget to add in a tilt sensor somewhere so the pump shuts off when you drop the bike. I don’t think that kit has one.

      • robotribe

        My easier solution to the 599 carburator handicap: they should have imported the 2007 & later Honda Hornet with FI.

        Der.

      • BMW11GS

        I know a company does a FI kit for the Kawasaki Ninja 250, I forgot where I saw it but it was about $500.

    • Myles

      I’ve (’04 599 owner) never had a carb issue. Ever. Hot days, cold days, wet days, dry days. Letting the bike sit for 5 months in my Dad’s garage when I caught a nail in my tire on Thanksgiving and being hella busy in the spring and not having time to go back home and get a new tire on and just straight up let it sit with zero prep. Ever.

      And you ALWAYS smell like fuel.

      What the hell is wrong with carbs? People associate old bikes with carbs, and old bikes weren’t reliable.

      • robotribe

        Don’t get me wrong, overall, it was a fun and reliable bike to own, but on the hotter days in So. Cal. (95 degrees^), my well-maintained 2006 599 took some effort find a decent idle, and in the colder months, that ideal choke position at start up was a guessing game.

  • slash5alive

    As long as Honda’s quality control people are on the job you can bet these will be good bikes. My 02 klr was built there from mostly Japanese parts and has had no quality issues. Ok, the doo hickey…but that’s a kawa issue.

  • http://www.TroyRank.com Troy R

    They’re still making the 919? Why can’t we still get them in the US? One of the best bikes ever made.

    • R13

      No, they continued to make it for europe but dropped it when the Cb1000r came out as a replacement.

      • http://www.TroyRank.com Troy R

        Ahh, who gets these things then?

  • Gene

    Well, considering everyone here has a computer… then it’s relevant to say that 97% of Western Digital and Seagate disk drives are made in Thailand, and have been for 10 years now.

    The recent floods in Thailand destroyed most of their manufacturing facilities, and that’s why prices recently doubled. There’s a 70 million drive shortfall in production this year.

  • Kevin

    Hey my bike on the front page of HFL!

    I love it for commuting, hate it for touring, happy with it overall. It’s generic I know, but damn reliable and a bit of fun as well.

  • Trevor

    My wife and I had the 599 and 919 respectively. Awesome bikes, very versatile and fun. I can’t understand why the two never caught on and if they did why Honda pulled them out of North America. I guess it’s the Sport bike, Cruiser or nothing mentality.

  • dux

    What? Honda still makes XR650′s? I think you mean XL650′s

    • dux

      Oh right, XR650L. Hardly an XR at all