Thai quality world standard: Honda

The availability of low-cost labour in developing nations means established automobile manufacturers are increasingly setting-up shop outside their home bases. But is there any difference in quality between, say, a Mexican-built Volkswagen and the German variety, or, in this case, Thai and Japanese-built Hondas? The carmakers will tell you no.

Honda set out to reinforce its faith in its offshore-built product via an invitation to visit its Thai production facilities last week. Spokespersons for Honda in Thailand told visiting Australian journalists that the company uses the same production processes across all its factories.

Honda's factories differ between countries in terms of output, staffing and automation but the finished product is the same, says the manufacturer. A new car buyer should not be able to discern a difference between a Civic built in Thailand or Japan, the company asserts.

"Our operations are under the one quality standard, for all over the world," said Honda Australia MD and CEO, Satoshi Matsuzawa. "Most of the customers don't care. Even if they know they've bought a Thai car, they can't recognise it... There is no issue on quality."

Honda Australia sources cars from Thailand, Japan and the UK. The Honda Automobile Thailand Co (HATC) factory in Ayutthaya, Thailand produces the Accord, CRV, City, Jazz and Civic sedan for Australia. From Japan we take the Civic Hybrid, Accord Euro, Odyssey and Legend. The Civic hatch in both five-door Si and three-door Type R is made in the UK's Swindon plant.

The premium Australians pay for the Type R reflects the cost of transporting the car from the Northern Hemisphere. Obviously regional sources are more efficient in terms of logistics -- and therefore cost. HATC started exporting cars to Australia in 1998 with the 'wide-bodied' (non-Euro) Accord. Thai-built cars now account for around 80 per cent of Hondas sold locally. In many ways Honda is now a Thai brand Down Under.

So where do the differences lie?

Honda's plant in Swindon produces CRV, Civic hatch and recently Jazz for around 240,000 units per annum. It employs over 3000 people and uses a high level of automation, largely due to requirements for a small footprint.

The Swindon facility is located on an old WWII airfield and Honda has used the plant to demonstrate 'green' building techniques. Production line design makes use of height rather than spreading across a long, flat factory so conveyer runs may take up multiple (four or five) levels. Storage requirements are kept to a minimum with use of 'Just in Time' process for delivery of parts.

HATC's first production facility in Thailand was in Bangkok. The current Ayutthaya plant, located 70km north of the Thai capital, was a green field project inaugurated in 1996. It supplies cars to 37 countries.

In contrast to Swindon it has a 'conventional' single-level layout. It has similar staff and production numbers to the UK plant yet its level of automation is significantly lower.

Ironically while some brands champion their hand-built status, most observers believe that a higher level of automation translates to a higher level of quality -- at least in mass-market brands. Honda argues its Thai-built cars match or better the quality levels from its other facilities around the globe.

At Honda's Swindon plant machines perform most tasks whereas in Ayutthaya, as an example, even the Civic's doors are hand-fitted. They are then set level, checked and checked again before the car gets to quality control at the end of the line.

Honda Thailand says this results in a fit and finish the equal if not better than Swindon. The shut of a car's doors is one of the influences in a customer's decision, a company spokesman told us.

The more precision or production-efficient elements, such as welding, are accommodated by robots at Ayutthaya. HATC says it will implement more robots as other processes that can be better mastered by machine than human are identified.

Yet it is in no rush to fully automate its Thai operations. HATC President Atsushi Fujimoto explained that given the high level of skill of Honda's Thai workforce ("associates" in Honda speak) the cost:benefit ratio of such automation still favours the human touch.

"The human can be more effective," reasoned HATC President Atsushi Fujimoto. "Machines are operated by people, after all."

Despite its confidence that all its factories achieve 'best practice' Honda does not readily release comparative quality data. In terms of initial production quality rating, HATC sources say the Thai plant betters Honda's North American operations.

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