Honda has reaffirmed it will not leave Thailand, which will continue to be its major base for Asia and Oceania.
"Honda is not shifting its production from Thailand to any other countries," the local subsidiary said in a statement yesterday.
Honda Automobile (Thailand) emerged to confirm its presence in Thailand and clear the air over speculation it may relocate its production base.
Last week, the company unveiled plans for a new US$337-million factory in Indonesia just days after saying it would build a new motorcycle factory in Asean's largest economy.
The company statement said expanding production capacity in Indonesia is part of the long-term development strategy for that market.
These expansion plans were in place well before the floods that affected Honda's Thai facilities, it said.
The new factory outside Jakarta is aimed at addressing Indonesia's booming demand for small automobiles.
Located beside Honda's existing plant that produces the Jazz, CR-V and Freed models, the new factory will make the Brio for the domestic market.
It will be operated by PT Honda Prospect Motor (HPM), a joint venture between Honda Motor Co (51%) and PT Prospect Motor (49%) that was formed in March 1999.
HPM will begin importing Brios from Thailand this year and then begin local production of them in Indonesia at the existing plant by the end of next year.
It will transfer production of the Brio to the new plant in 2014.
"Honda's investment in a new car plant in Indonesia has nothing to do with its investment in Thailand," said Anjali Jalichandra, the corporate affairs manager at Asian Honda Motor Co Ltd.
Mrs Anjali said Honda will resume production at its Rojana Industrial Park factory about the middle of next week. Full capacity is expected by next month.
Earlier, a statement by Hiroshi Kobayashi, the parent company's managing officer and chief operating officer for Asia and Oceania, raised concerns about the company's future in Thailand.
"Our operations in Indonesia will take the next step to become more autonomous and play an even more important role for Honda in this region. Honda will not only build automobiles in Indonesia to meet the needs of customers here. Indonesia will serve as a key export base for Honda _ for both completed vehicles and components," he said in that statement.
Honda's Ayutthaya plant was battered by last year's devastating floods that brought its vehicle production to a complete halt in October.
The factory normally produces 240,000 vehicles annually. Besides damage to the factory, 1,055 finished cars were totalled and had to be scrapped.