According to a report in Japan’s Yomiuri Shimbun newspaper, Kawasaki plans to begin moving production of its large-displacement motorcycles from the company’s main Akashi Works factory in Japan to its existing facilities in Thailand next year in order to cut production costs. The motorcycle manufacturers have been suffering heavy losses due to sluggish sales in the current sagging economy, forcing them to look for various methods to cut costs, and moving production facilities to countries with lower labor and operating costs is a common step.
Kawasaki—like most of the other Japanese manufacturers—already operates a production plant for small and midsize motorcycles in Thailand that are made for the Southeast Asian markets. According to the report, Kawasaki Heavy Industries, Ltd. (KHI) produced about 150,000 motorcycles at the Akashi Works factory, and approximately 110,000 motorcycles at its current Thailand plant during the fiscal year 2008; in the current fiscal year, KHI plans to reduce output of the Akashi factory to about 100,000 units as demand in the main markets for larger motorcycles—Japan, Europe, and the U.S.—are unlikely to rebound in the near future (the production at the Thailand facility will remain the same). In fiscal 2010, KHI plans to begin producing motorcycles larger than 650cc and increase output of mid-size bikes in Thailand. The Akashi factory in Japan will continue to manufacture some high-end large-displacement models (presumably sportbikes and some other large street models that require more difficult assembly techniques due to their complexity), although production numbers overall will be sharply cut in the future. Sources for the report also state that the company aims to additionally slash production costs by using Thai-manufactured parts for some of its high-end models.
Kawasaki will become the first major manufacturer to make this move, although Honda is reportedly considering a similar shift of large-size motorcycle production to its own Thailand factory. Given the current economic environment—nearly all the manufacturers fell into the red with regard to operational profits in fiscal 2008, and the same or worse can be expected for 2009—plus the slow pace of any rebound, this trend will likely continue to gather momentum with other manufacturers, according to sources in the report.