Mexico plant adds problems for Honda

Article by Andrew Christian, on October 28, 2014

Honda Motor Co. turned to Mexico to better meet growing demand for its vehicles as well as take advantage of the location, the lower wages and free trade pacts that country offers. But instead of helping the carmaker iron out its demand issue, the site has added a score of problems like the ones caused by a green labor force, language barriers and an unreliable rail system, according to dealers who have met with Honda officials.

These are the same issues that led a two-month delay of the rollout of its first product, the redesigned 2015 Fit subcompact. Additionally, the vehicle was found to have some quality issues and the delayed output has caused some shortages.

According to dealers, these have prompted Honda to push back the launch of the site’s second product, the new HR-V small-crossover. Dealers were initially bound to receive shipments of the HR-V by end of 2014, but now have to wait until next spring because they could get hold of their supplies.

Ron Harbour, a partner at consulting firm Oliver Wyman and an expert on auto plant efficiency, told Automotive News that the hitches with the Fit and the plant are “un-Honda-like” or far from what is typical of the carmaker when it starts a new manufacturing site in the United States or Canada.

Honda's currently troubles in Mexico should serve a warning for other carmakers that have already or are planning to set up manufacturing operations in the country.

Honda recently disclosed that it is reviewing its quality protocols after finding some quality issues with the Fit. In fact, Honda has recalled the Fit five times already in 12 months – prompting it to appoint quality czar to oversee quality issues from r&d to market launch.

Topics: honda, mexico, plant

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