Honda to suspend Mexico production on shortages

Automaker Honda will temporarily suspend production at its plant in Celaya, Mexico, starting tomorrow because of supply chain problems.

"We are dealing with supply chain issues related to the Covid-19 pandemic and the shortage of semiconductors," Honda's Mexico unit told Argus.

The company does not yet have a projected date to restart the plant.

"We are working with the providers to resolve the situation," Honda said.

Honda Mexico's planned shutdown comes on the heels of an announcement earlier today that the company plans to suspend production at most of its US and Canadian plants for one week beginning on 22 March.

The company said that decision was made because of the lingering impacts from Covid-19, congestion at various ports, the global semiconductor shortage and severe winter weather over the past several weeks.

The decision to shut the Mexican plant was made in coordination with the other North America stoppages, the Mexican unit said.

Honda Mexico will likely make up for lost production once the plant restarts, but the spokesman did not have projected output numbers. He also did not have information on the volume of production expected to be lost because of the shutdown.

Honda's Celaya plant manufactures the HR-V model and has an annual capacity of around 200,000 units.

Mexican light vehicle exports and production fell in January and February because of the global shortage of semiconductors, according to the country's national auto parts association (INA).

Semiconductor supply should return to normal by the middle of the year, the association's director Oscar Albin said earlier this month.

"It is a problem but not a crisis," Albin said on 8 March.

Mexican vehicle exports fell by 22pc last month compared with February 2020, while production declined by 29pc year over year.

By Jens Erik Gould