Honda Vietnam faces threat of shutdown
HANOI - Honda Vietnam, the country's largest motorbike assembler,
faces the threat of a shutdown because of a government-imposed limit on the
number of parts it can import, state-controlled media reported Saturday.
The Ministry of Trade, in a decision Wednesday, limited Honda Vietnam, a
joint venture between Japan's Honda Motor Co. and a local
company, to 280,000 sets of imported parts in 2002, the Lao Dong (Labor)
newspaper said. Each set is for one motorbike, and the company had already
produced 281,629 motorbikes as of Thursday, it said.
The newspaper quoted Honda Vietnam general director Hiroshi Sekiguchi as
saying that the Trade Ministry's decision meant the company will be forced to
suspend production from Sept. 14 and lay off 2,618 workers because it cannot
import any more parts.
Honda Vietnam has signed contracts with foreign suppliers to buy 586,800 sets
of parts, and 417,200 sets are already on their way to Vietnam, the newspaper
quoted Sekiguchi as saying.
Company officials were not available for comment Saturday.
Honda Vietnam, which began operations in late 1997, is one of five motorbike
joint ventures between foreign companies and local partners. It buys about 50
percent of the parts for each motorbike from local suppliers and imports the
rest, the report said.
The newspaper quoted Vice Trade Minister Mai Van Dau as saying the
government has imposed a combined limit of 1.5 million sets of imported parts
for all motorbike assemblers this year.
Of that, 600,000 sets are allotted to the joint ventures with foreign partners,
including 280,000 sets for Honda Vietnam, and the remainder for nearly 50 local
motorbike assemblers, he said.
The Trade Ministry will have to seek instructions from the prime minister on
Honda's appeal for a higher ceiling, Dau was quoted as saying.
Last year, Vietnam imported nearly 2 million sets of motorbike parts.
The country, with 79 million people, has more than 8 million motorbikes, which
have contributed to soaring numbers of traffic accidents, resulting in the deaths
of more than 10,000 people last year.
The Asssociated Press - September 07, 2002.
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